Online Learning vs. Face-to-Face, Who Wins? The Outsourcer.

Expert opinion and cost pressures are shifting education online, according to a thought provoking post in today’s NY Times. Apparently, online learning now beats face-to-face teaching by a modest but statistically meaningful margin.


Pondering this change, by sheer coincidence I received an even more thought provoking post from my classmate Patrick Winston via the MIT Alumni Assn. blog, Slice of MIT. It was written in the first person, is brief, and the post struck me so strongly that I am reproducing it intact, something I have never done before.

Gerry Sussman burst into my office. “You were right!” he said.


“About what?”


“Twenty-five years ago, you said we should get rid of 10% of the faculty and use the money to hire unemployed, English-speaking, Indian PhDs to tutor our students individually over the web.”


“Yes,” I remembered, a little surprised that he remembered.


“Well, it’s happened.”


He had just heard a BBC report on TutorVista, of Banglore, which offers tutoring to kids at $2.50 per hour.


Now for the rest of the story. This year, my subject, 6.034, will join 40 others available from OpenCourseWare with video recording of the lectures. Many more are coming.


When I was a kid, I went to MIT because that was the only way I could have Arthur Mattuck tell me about mathematics; Tony French, about physics; Amar Bose, about circuits; and Gerry Lettvin about what the frog’s eye tells the frog’s brain.


But sitting in a lecture hall is no longer a good reason to be at MIT. You can watch today’s analogs of those great lecturers without spending $50,000 a year. In fact, if you can’t afford a computer, you can watch them for nothing at your local library. If you can spare $2.50, you can probably find someone in India to help you through the rough spots.


Of course, there still are plenty of reasons to be physically at MIT; here are a few that come to mind: working problem sets together late at night, the smaller classes, UROP, TEAL, IAP, BattleCode, and the 100K Contest.


Still, I don’t think we at MIT are thinking enough about the future, because, well, here is another prediction: twenty-five years from now there will only be 500 or so English-language lecturers. They will paid like sports stars to develop new material offered up by OpenGooggleWare, along with advertisements. Who knows what the rest of us will be doing. Maybe tutoring Indian students over the web.

I tip my scally cap to classmate Patrick Winston, now Professor Patrick Henry Winston ’65, SM ’67, PhD ’70,  and I recommend his Pensées to all.

In Defense of the Infinite Corridor (MIT)

Occasionally I come across challenges to MIT’s Infinite Corridor based on its length compared to other corridors that may or may not exist elsewhere in the same universe. Of course, it is intuitively obvious to even the most casual observer that at a mere 147.491 Smoots from its entrance in building seven to the exit at building eight, the apparent length of the corridor is not very great. After all, the bridge connecting Boston to MIT measures a full 374.4 Smoots +/- one ear.

For a full explanation, I’ll draw on two of my fictional characters, walking the corridor for the first time in 1961, about the time that “IHTFP” became the de facto motto of the undergraduate student body.
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“So this is what they call “the Infinite Corridor.” Bill said to me as we walked along the lengthy hallway from Building Seven to Building Fourteen.

“Don’t they also call it something else, Stonehenge or something?”

“ MIT-henge, I think,” he replied.

To the uninitiated, we were walking from MIT’s main entrance on Mass. Ave toward the Hayden Memorial Library. MIT people communicated largely in numbers: buildings, courses, departments, were all identified that way.

The Infinite Corridor is the hallway, 251 meters (825 feet, 0.16 miles) long, that runs through the main buildings of MIT. This corridor, which at its midpoint passes directly under the Great Dome, serves as the most direct indoor route between the east and west ends of the campus.

As for MIT-henge, on several days each year, the sun sets in alignment with the Infinite Corridor and shines along its entire length. "MIT-henge" is a reference to Stonehenge's alignment with the sun. This occurs on several days around January 31 and November 11.

Myself, I never considered it “Infinite” because of its length, as that would define infinity as linear, and we all know that, like our life stories, infinity always turns back upon itself. It was actually one of four to nine connecting corridors, one on each floor. Intersecting on each level were U-shaped corridors bending back to their start. Staircases stood in each intersection. Every serious physics student is familiar with the Möbius Strip, a model of infinity that can easily be created by taking a paper strip and giving it a half-twist, and then joining the ends of the strip together to form a loop. M. C. Escher has a famous example, “Möbius Strip II”, featuring ants crawling endlessly around the surface of one. Add his “Ascending and Descending” to represent the staircases and you have a well decorated dorm room. Escher’s prints were popular items at our bookstore, “The MIT COOP.”

These corridors and stairways of MIT, with pipes exposed overhead and radiation and electrical warnings on many doors, were all painted a drab grey-green, giving MIT an industrial era appearance contrasting starkly with the classical architecture of Harvard and Wellesley. Some of my classmates would dream they were lost forever in this maze. My nightmare was that the corridors were bones, and that the buildings had decayed away, leaving only the rib cage of a vast evil leviathan to bleach on the muddy shores of the Charles. And rumors persist that on moonless nights you may still encounter the ghost of Claude Shannon on his unicycle, juggling as he propels himself through the maze.

You might note that today MIT has many new buildings on campus, many connecting with the original network of corridors. But remember, if the corridor is already infinite, adding all those new connections doesn’t increase the length at all.

You can find an interactive map of the current MIT campus here.

The explanation above is drawn from “Killer App –A Murder at MIT,” my novel in progress.

MIT and India Build a Global Force in IT

I never once suspected how large a role MIT played in building India into the force it is today in the global IT industry, despite my having attended many meetings stressing the symbiotic relationship between MIT and Entrepreneurship. Recently, Professor Ed Roberts described the significant contributions to the US economy made by foreign students who attended MIT and subsequently started companies here. Then I received the following invitation to a lecture at the Computer History Museum in Mountain View, CA:


“In the last fifteen years the very names Bangalore and Silicon Valley have become evocative of the important connections between India and the United States in the global IT industry. Historian Ross Bassett argues that the linkages between the two countries are far older and deeper than is widely known. In the course of his research, he found that Indian graduates of MIT, to a remarkable extent, significantly influenced the creation of modern technological India. In the colonial period, a small group of Indians, including some associated with Gandhi, went to MIT as an anti-colonial act and as a way to develop technological capabilities for India. Indian graduates of MIT played a key role in the founding of the Indian Institutes of Technology (IIT), and in the years after 1947, were central figures in the Indian steel industry, the atomic program, and the space program. The Indian IT industry today is to an astounding degree the product of Indian graduates of MIT. Since 1965, Indian graduates of MIT and graduates of MIT once removed---that is graduates of the IITs---have also played an increasingly important role in American technology and computing.”

Alas, I won’t be able to attend this lecture, which is being held on Thursday, July 15. The Museum runs a variety of intellectually stimulating events such as this one. At the very least, I would recommend you visit their web site and subscribe to their electronic newsletter. Having been one of the founders of the original Digital Computer Museum, located here in Boston on Museum Wharf, it continues to sadden me that it moved to California. You can view a video describing the origin and goals of the museum here.

One museum function that I did attend was celebrating the fortieth anniversary of the IBM System/360. That night’s entire program can also be seen on video, although they stopped filming just as Bill Worthington and I joined Gene Amdahl, Fred Brooks, and many other members of the original team cutting the birthday cake.

Now about that outsourcing............

The iPad's Impact On Other Devices

Resolve Market Research has just completed a comprehensive study that looks at how the iPad is being used, and how the iPad is impacting other technology devices like e-readers, portable gaming consoles and netbooks. You can read more about it here.

The Boston Regional Entrepreneurship Week 100

Yesterday, I wrote that Joe Caruso was hoping to recruit 100 thought leaders for a Boston Regional Entrepreneurship Week  (BREW) to be held the week of Oct. 12, 2010. Joe was concerned that time was short to plan and organize this event.

Joe just got his 100th member, just 24 hours after he asked. It is quite an impressive group. Opinion leader or not, you can join the group here. Should that fail, go to Linkedin and look up “Boston Regional Entrepreneurship Week.”

I tip my straw hat to Joe Caruso and his 100 BREW volunteers.

Internet Trends 2010 by Morgan Stanley Research

The last time I wrote about Morgan Stanley presentations, they had just published their report on the mobile internet. Now, just seven months later, the mobile internet has become just the internet. These reports contain great data for anyone who is preparing a business plan for a new venture.

Internet Trends 2010 by Morgan Stanley Research

View more presentations from CM Summit: Marketing in Real Time.

A new BREW: the Boston Regional Entrepreneurship Week in October

A number of our very active local Angel Investors have cooked up a plan to designate the week of Oct. 12 as Boston Regional Entrepreneurship Week. Present at the inception were Angel-at-Large Joe Caruso and Unconference Disorganizer Bill Warner, joined by Chris Sheehan, Dharmesh Shah, John Landry, and Jean Hammond.

“We're trying to expand Bill Warner's Unconference into a week of activity and celebration for entrepreneurial activities in Boston. We were just talking about the idea, and suddenly it has taken on a life of its own,” says Caruso, who hopes to involve Angel Groups, Venture Capitalists, technology-based corporations, and the Commonwealth of Massachusetts.

“We are hoping to get 100 thought leaders onboard very quickly,” says Caruso. He’s off to a good start. He set up a Linkedin group this morning and by midday he had 23 members.”

Opinion leader or not, you can join the group here. Should that fail, go to Linkedin and look up “Boston Regional Entrepreneurship Week.”

You can also contribute to discussions on Linkedin. I suggested to Joe that they expand the boundaries of the group beyond those regularly honored, running roughly from Microsoft NERD to the Longfellow Bridge, then West to the Kendall Square Red Line Stop, and South to the Stata Building at MIT. Using Saul Steinberg’s famous New Yorker Poster, “View of the World” as a guide, Joe promises to consider the idea.

New Hampshire’s New Start-Up Accelerator

A team of technology entrepreneurs led by Mark Galvin has partnered with the University of New Hampshire (UNH) to launch a new startup business accelerator - the New Hampshire Innovation Commercialization Center (NH-ICC). The goal of this nonprofit center, located at the Pease Tradeport, is to create new jobs in the region by selecting high potential early stage companies and providing them with a combination of business resources, seed capital and “hands on involvement” by seasoned startup executives.

UNH, which has developed a strong entrepreneurial culture through spin-off companies, by housing the internationally respected Center for Venture Research, and through its campus-wide Holloway Business Plan competition, provided startup capital for the NH-ICC as well as expertise in creating the unique public-private relationship. The NH-ICC will work to facilitate the use of university research by its resident companies through licensing and royalty agreements. UNH will also provide resident companies with student research assistants and mentors from its colleges, including the Whittemore School of Business and Economics.

“This is a great opportunity for the university to support technology entrepreneurship both on our campus and in our community, while at the same time leveraging our resources to help support the creation of private sector jobs in the state,” said UNH President Mark W. Huddleston. “Turning the university’s intellectual capital into commercial opportunities as a way not only to expand revenue streams but to enhance economic development and job creation in the state is a key component of the university’s 10-year strategic plan and I’m pleased we are well on the way to seeing results.”

“The economic downturn of the past two years has taken a significant toll on the New Hampshire startup community, where a host of innovative new technologies – not to mention local jobs - are languishing on the sidelines because of the lack of a viable path to commercialization,” said Mark Galvin, the founder of Whaleback Systems in Portsmouth, Cedar Point Communications in Derry and managing director of the NH-ICC. “The NH-ICC will provide a path for promising early stage companies to bring their products to market while also creating sustainable, high-value private sector jobs in the state.”

Added Galvin, “UNH has played a critical role in getting this initiative off the ground, providing both resources and funding. We look forward to helping the university accelerate the commercialization of its research, inventions and technology while also using the NH-ICC to attract entrepreneurs from throughout New England to build their startup business in New Hampshire.”

The NH-ICC will select up to 12 seed stage technology companies on a rolling 12-month basis and “graduate” resident companies after 18 months with the expectation that they will remain in New Hampshire, grow rapidly and create new jobs. The NH-ICC’s operations will be funded through a seed investment from UNH, private investment fund management fees and carried interest, and matching business development grants. Selected resident companies will receive $100,000 to $250,000 in seed funding from the private investment fund.



UNH has had a strong entrepreneurial focus since at least 1984, when the Center for Venture Research was created within the Whittemore School of Business and Economics. Currently led by Director Jeffrey Sohl, the Center studies early stage equity financing for high growth ventures.

The Whittemore School Holloway Prize Innovation-to-Market Competition, established in 1988, is designed to stimulate entrepreneurship throughout the University System of New Hampshire. A short video of this year’s final round is available on WMUR's Chronicle.

In 2001, the first company was spun off from UNH. Chaoticom, a joint project of the Math Department and the Whittemore School, received seed funding from the eCoast Angels Investment Network.

Now,  in 2010, we have NH-ICC. AT IBM in the 1960s, we knew it was summer when the Branch Manager switched to his straw hat.  This summer, I tip my straw hat to Mark Galvin for getting this accelerator launched.

Angel Investors, Measuring Their Added Value

Can you measure the value that angel investors add toward the success and growth of new ventures?

Following a recent Tweet from CommonAngels (aka James Geshwiler) , I uncovered a working paper on this topic authored by William R. Kerr and Josh Lerner of HBS and Antoinette Schoar of MIT. Their conclusions:

• Angel-funded firms are significantly more likely to survive at least four years  and to raise additional financing outside the angel group,

• Angel-funded firms are also more likely to show improved venture performance and growth as measured through growth in Web site traffic and Web site rankings; The improvement gains typically range between 30 and 50 percent,

• Investment success is highly predicated by the interest level of angels during the entrepreneur's initial presentation and by the angels' subsequent due diligence,

• Access to capital per se may not be the most important value-added that angel groups bring. Some of the "softer" features, such as angels' mentoring or business contacts, may help new ventures the most.

Another interesting conclusion: “Angel investors as research subjects have received much less attention than venture capitalists, even though some estimates suggest that these investors are as significant a force for high-potential start-up investments as venture capitalists, and are even more significant as investors elsewhere. This study demonstrates the importance of angel investments to the success and survival of entrepreneurial firms.”

I am particularly intrigued by the authors’ conclusion that mentoring and business contacts may be more valuable than money. Entrepreneurs never make me feel that way, which is unfortunate, as I have lots of advice available.


The study is based primarily on data provided by the Tech Coast Angels and the Common Angels. Cooperating with the authors were some of the usual suspects: James Geshwiler of CommonAngels, Warren Hanselman and Richard Sudek of Tech Coast Angels, and John May of the Washington Dinner Club. The Kauffman Foundation partially supported this research.

You can find a summary of this paper, The Consequences of Entrepreneurial Finance: A Regression Discontinuity Analysis, right here. The full paper is also available online.

Open Angel Forum to Slay Chimera, June 18

The Open Angel Forum is coming to Boston on June 18, and they will be very welcome. I do wish, however, that they would either change the way they present themselves or that our local journalists would do a better job of providing perspective so as not to undermine the very values the OAF claims to promote.

For example, Scott Kirsner, one of the most vigorous and talented journalists covering the technology scene, writes in his blog: "Peeved about events that charge entrepreneurs an entry fee to present their businesses to angel investors, Jason Calacanis decided to create Open Angel Forum earlier this year. The series of events, held so far in places like San Francisco, New York, and Los Angeles, is 'dedicated to providing entrepreneurs with free and open access to the angel investors that they need,' according to the Web site."

I cannot understand how local entrepreneurs, particularly inexperienced ones, can read that description without inferring that they do not currently have "free and open access" to our local Angels and Angel groups, while in fact we have the world's longest continuous tradition of open access. And I hate to think that even one prospective entrepreneur would be discouraged from applying to our local groups because he has been warned off by assertions of "high charges."

In this isolated case of misreporting, Kirsner doesn't stand alone, as similar notices have appeared in Xconomy, Mass. High Tech, Boston Business Journal, and will undoubtedly be repeated many times in the next few weeks. Here is what Mass High Tech has to say: "Calacanis launched the Open Angel Forum in December out of anger over so-called “pay to play” angel groups, which charge startups a fee to present their pitches."

And while I applaud the attempt to make Angel capital more accessible to entrepreneurs, I feel a need to point out that in not charging presenters the Forum is not innovating, but is just following the tradition of most existing angel groups.

New England has a long tradition of Angel Investing without charging fees to entrepreneurs. To my own knowledge, the first of our regional Angel Groups was the Breakfast Club, formed in 1976 by Mort Goulder, Dick Morley, George Schwenk, and Doug Drane. Still operating, The Breakfast Club reviewed about two business deals a week, investing in about four companies a year. Morley and Schwenk estimate that the club has boosted more than 100 startups. To many, the face of the breakfast club was the late Mort Goulder. “He was a great inspiration to a lot of companies,” Schwenk said. “It’s interesting how many e-mails have been written about him in the last two years. I didn’t know techies could write so well.”

One well known startup that benefited from The Breakfast Club was Carbonite, a Boston firm that provides back-up systems to computers. “Mort is just one of these guys who just makes things happen,” said David Friend, president of Carbonite. “He was just busy, busy, busy. For a guy his age to be running around like that was amazing.” The Common Angels was another seed round investor.

Another example is VKernel of Andover, a joint project of the Breakfast Club and the eCoast Angels."Mort was both a mentor and friend. A true inspiration to the high tech entrepreneurial spirit of New Hampshire," founder Alex Bakman said recently.

Some angels who learned from the Breakfast Club and went on to form other Angel groups include Jean Hammond, a founder of Golden Seeds , and myself, co-founder of the eCoast Angels.

Angels tend to invest locally, so the first thing an entrepreneur should do is check group listings on the Angel Capital Association (ACA) web site. The ACA, under the leadership of Common Angels Managing Director James Geshwiler, began discouraging members from charging presentation fees and continues to do so today. On the ACA site, a local entrepreneur will find 16 New England Based Angel groups. Polling these groups earlier this year, I found only one, Golden Seeds, charged, and that the charge was minimal, $100.

Many groups of Angels, such as The Breakfast Club, are not members of the ACA. In New Hampshire alone, I know there are such groups in Nashua, Hanover, Keene, and in the Mt. Washington Valley. Additionally, not all Angels are in groups. The number of active Angel Investors in 2009 was 259,480 individuals, according to the best source available, the Center for Venture Research at UNH. Collectively, these Angels invested $17.6 billion last year, spread over a total of 57,225 entrepreneurial ventures. Expressed as a round number, I estimate that the number of these Angels who charged presentation fees is zero.

Finding these unaffiliated groups and individuals can be more difficult for the entrepreneur, but it is relatively easy for anyone who is wired into her local technical and business community. Ask other entrepreneurs, as well as attorneys, accountants, and bankers. They'll know.

Talking recently with Jeff Sohl, Director of the Center for Venture Research, we discussed two actual problems limiting the growth of Angel investment. The first is encouraging more people to become Angels. There are lots of individuals with sufficient resources to be Angels, but they never see any deals, have no clear idea how to find and evaluate them, and are thus in the bleachers rather than on the field. The other real problem is what Jeff calls "latent Angels." Latent Angels join a group or attend investment presentations, but they can never quite bring themselves to actually make an investment, thus relegating themselves to the dugout.

Perhaps Jason Calacanis' Open Angel Forum, leaving the slaying of the Chimera to Bellerophon, could use its magnificent publicity machine to get more Angels onto the field and into the game.

Mobile Startups at the MIT Museum - June 7th

If you can make it into Cambridge, Mobile Monday is taking over the MIT Museum for a night of mobile exhibitions, food, and drink on June 7th. Come see new mobile startups including Springpad, Peekaboo, RaizLabs, Zazu, Vendee, Two forty four am, LiquidBits, uGuideMe, Delfigo Security, Hello Vino, Tweetworks, Adva Mobile, Sayagle, and many more.

Date: Monday, June 7th from 6.30pm to 9pm.

Location: MIT Museum in Cambridge.

Register at the Mobile Monday Boston Web Site.
 
As you enter the MIT Museum, directly across Windsor Street is MIT's Barta Building (now building N42) which housed  the famous Whirlwind  project, which I described in an earlier post. Built in 1904, the building was restored to its original brick exterior with its distinctive gargoyles in 1997-8. It is neigh impossible to overstate the significance of Whirwind to the development of Route 128 as a center of computing technology and venture capital.

Two million iPods sold, Apple Self-Esteem Hits Record High

Apple® today announced that iPad™ sales have topped two million in the less than 60 days since its launch on April 3. Originally available only in the US, this weekend Apple began shipping iPad in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK. iPad will be available in nine more countries in July and additional countries later this year.

"We are working hard to build enough iPads for everyone“ said Steve Jobs, Apple’s CEO. “We appreciate their patience."

In today's press release, Apple modestly describes itself as follows: "Apple ignited the personal computer revolution with the Apple II, then reinvented the personal computer with the Macintosh. Apple continues to lead the industry with its award-winning computers, OS X operating system, and iLife, iWork and professional applications. Apple leads the digital music revolution with its iPods and iTunes online store, has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices."

High self-esteem can be a wonderful thing to behold. It is very hard to argue with great sucess.

Virtual Machines for Harvard Commencement

Dear Reader: each year at the Harvard Commencement, three graduating students speak to approximately 32,000 students, faculty, parents, alumni/ae, and guests. As the first anthem concludes, a senior strides to the microphone and announces, "Salvete omnes!" What follows is one of the oldest of Harvard traditions - an oration in Latin. Although we had no similar tradition at MIT, I thought I would contribute this modest effort to the cause of improving communication between layabouts studying long-dead topics and superheroes developing exciting new technology.

Salavete omnes! VM est omnis divisa in partes tres, placitum et inventor Bob Creasy. Primary component eram hypervisor. Alter CMS , sermo monitor ratio. tertius eram RSCS , Longinquus Spooling Defero Subsystem. Horum omnium fortissimi sunt Hypervisor. Dissimilis alius IBM operating ratio VM /370, quod suus decessor CP -40 quod CP /67, postulo proprius intentio repono tutela quod relocation hardware. Creasy had seen mane in et relocation hardware could soleo suggero rectum apparatus pariter et rectum memoria. Is insight venit et him dum inrideo MBTA LXXVII bus ex Arlington ut Cambridge.

EGO propono a toast ut IBM Cambridge Scientific Center quod et suus farsighted procurator , Norm Rasmussen.

Bob Creasy Invented Virtual Machines on the #77 Bus

Don Dodge reveals “How to unlock your creative genius” on his blog this week. “We are all creative but our human experience filters, and conscious mind, block out creative bursts,” writes Don. “We are much more creative while sleeping…artists, song writers, poets, comedians, and entertainers of all kinds have that amazing creative ability while they are awake.

Last week, while driving from Arlington, MA into Cambridge, I was stuck behind the #77 bus (colloquially known as the Mass. Ave. bus).

I recalled that Bob Creasy invented the concept of the virtual machine on this bus. I don’t know if he was awake or asleep at the time, but it was most likely in the morning.

Creasy had been working as a programmer on CTSS when MIT awarded the project MAC (Multics) contract to GE. In contrast, Creasy was impressed with IBM’s new S/360 product line. Creasy had, of course, spotted the most important attribute of the System/360 - that programs written for one model of S/360 would run on any other model.

Since he was disappointed with the direction of MAC, when he heard that Norm Rasmussen, Manager of IBM’s Cambridge Scientific Center, intended to build a time sharing system based on IBM’s System/360 and needed someone to lead the project, Creasy left MIT to join IBM.

Creasy had decided to build what became “CP-40” while riding the Metropolitan Transit Authority. “I launched the effort between Christmas 1964 and year’s end, after making the decision while on an MTA bus from Arlington to Cambridge. It was a Tuesday, I believe,” Creasy said in a later interview with Melinda Varian.

Creasy and a colleague, Les Comeau, spent the last week of the year excitedly brainstorming the design of CP-40, a new kind of operating system, a system that would provide not only virtual memory, but also virtual machines. They had seen that the cleanest way to protect users from one another (and to preserve compatibility as the new System/360 design evolved) was to use the System/360 Principles of Operations manual to describe the user’s interface to the Control Program. Each user would have a complete System/360 virtual machine (which at first was called a “pseudo-machine”).

The idea of a virtual machine system had been kicked around before then, but it had never really been implemented. The idea of a virtual S/360 was new, but what was really important about their concept was that nobody until then had seen how elegantly a virtual machine system could be built, with very minor hardware changes and not much software.

Rasmussen approved the project, but described it to his bosses as a research project to help the troops in Poughkeepsie (home of “Time Sharing System/360,” IBM’s official effort). Specific technical objectives were always emphasized in order to disguise the “counter-strategic” nature of the activity. But the project’s real purpose was to build a time-sharing system superior to TSS and MULTICS. Luckily for IBM, for us, and for Cloud Computing, it succeeded.

The combination of CP-40 and a single user operating system called CMS evolved into CP/CMS which was made available to IBM customers in 1967. In 1972, a revised version was released as IBM’s VM/370 product.

Feeling that his contribution to computing has yet to be fully recognized, I recently added a short biography of Creasy to the Wikipedia.

iPad parts cost at least $259, what about new iPhones?

For innovative products, price and cost may at first not be directly related, but, as Damon Runyon says, "The race is not always to the swift, nor the battle to the strong, but that is the way to bet."

I enjoy reading how iSuppli and other firms dissemble products to determine their cost. For example, Apple's iPad tablet computer costs as little as $259.60 to build.

Materials for the iPad, which went on sale Apr. 3, include a touchscreen display that costs $95 and a $26.80 processor designed by Apple and manufactured by Samsung Electronics, according to El Segundo (Calif.)-based iSuppli. This analysis means that the components of the lowest-priced iPad, which includes 16 GB of memory, constitute 52% of its $499 retail price, on par with other Apple products including the iPhone 3GS. You can find more details on the costs in an article by Arik Hesseldahl in Business Week.

Will the iPad price trend resemble the iPhone? Back in 2007, early iPhone adopters paid $600 for a phone. Two months later, Apple dropped the price to $400. Then, in June 2009, it introduced a better version, with twice the storage, for $200, one-third the original’s price. Now as we anxiously anticipate a new iPhone, we all wonder what the price will be.

Back to the iPad, will the cost drop significantly? Probably so. And when it does, we should follow the advice of DAMON DARLIN, “Applause, Please, for Early Adopters,” as related in the NYTimes.

“WHY would anyone rush to buy a product knowing full well that it would be cheaper — and probably better — in a matter of months?

”What is truly remarkable about this surge in consumption is that early adopters — those who simply have to own a new gadget right away — cheerfully exhibited what might seem to be irrational behavior. These ardent consumers will stand in long lines, if that’s what it takes, to get an overpriced gadget ahead of everyone else they know.” In my own case, I want to thank my former student, Rick Genter, the first person to show me an iPad.

If you are an entrepreneur contemplating product development in the iPad/iPhone arena, or represent a large volume purchaser of similar products, it would be very helpful to have direct access to the reports from iSuppli. “Unfortunately iSuppli does not allow for public posting of our report pricing,” says Debra Jaramilla, Manager, Marketing. “However, please do direct them (you) to info@isuppli.com or 310.524.4007 for more questions.”

Len Kleinrock, Gordon Moore, and Michael Rabin Receiving Dan David Award

Three great pioneers of the information age are being honored today, receiving the international Dan David Prize, endowed by the Dan David Foundation and headquartered at Tel Aviv University. The prize includes a $1 million award, which these three honourees will share.

"I am humbled and tremendously thankful to be receiving this great honor," said Kleinrock of the prestigious award, which annually recognizes individuals whose achievements have had an outstanding scientific, technological, cultural or social impact on the world. Previous winners have included Tony Blair, Yo-Yo Ma, Zubin Mehta, Al Gore and Tom Stoppard.

The Dan David Prize recognizes and encourages innovative and interdisciplinary research that cuts across traditional boundaries and paradigms. It aims to foster universal values of excellence, creativity, justice, democracy and progress and to promote the scientific, technological and humanistic achievements that advance and improve our world.

"To be able to also donate a portion of my Dan David Prize to worthy doctoral students pursuing research in my field of networking is a delight. The field of networks is continually expanding, and the opportunities to make an important contribution to the field are manifold. I look forward to being able to provide guidance in these students' research," said Kleinrock, who plans to recommend a recipient and will consider students from UCLA.

I know Len is attending the award ceremony, he sent me a note from there this morning. Len is sometimes called “the father of the internet” (though not by himself). Click here to read his bio on the Dan David site.

Gordon E. Moore’s prediction in 1965, widely known as "Moore's Law", stated that the number of transistors on a chip will double about every two years. Moore's Law has become the guiding principle for the semiconductor industry to deliver ever-more-powerful chips while decreasing the cost of electronics. I have read that there are two billion transistors on Intel’s latest Itanium Chip, but I didn’t actually count them myself; Moore bio here.

Michael Rabin has distinguished himself with his groundbreaking work on ways to improve privacy and create unbreakable ways to encrypt data, bio here.

This year’s honourees in other fields are:

Giorgio Napolitano, President of the Republic of Italy, known for his dedication to the cause of Parliamentary democracy and his contribution to the rapprochement between the Italian Left and European Socialism.

Margaret Atwood, a prolific Canadian writer who has produced more than forty volumes of poetry, fiction, children's books, political essays, and cultural criticism. Her work enabled, for the first time, the emergence of a defined Canadian identity.

Amitav Ghosh, is an lndian-Bengali novelist whose work offers a panoramic treatment of twentieth-century history from a postcolonial perspective.

The awards ceremony is taking place about the time I post this blog. Congratulations to all of these awardees and may the wind be always at their back.

Addendum: You can view a video of the actual awards ceremony here; it is quite an elegant show and clearly a moving experience for the honorees.  If you are only interested in the technology awards , fast forward to about 1:21 where Len tells you how the variable capacitor in his crystal radio lured him into a lifetime of invention.

Build your own cloud, why not?

Three huge global banks are about to announce the formation of an IT buying consortium intending to not only drive down their costs but also giving them the option of creating their own highly secure global cloud infrastructure and network.

"Commonwealth Bank of Australia has teamed with Bank of America and Deutsche Bank to create a global technology buyer's consortium that will strip away billions of dollars in back-office computing costs by combining the purchasing power of the three institutions,” according to the Australian Financial Review.

"To be launched on May 17, the formation of the bank-owned purchasing syndicate poses a formidable challenge to technology heavyweights including Microsoft, IBM, Hewlett-Packard, and Oracle which, for the last 20 years, have reaped huge profits collecting the equivalent of annual rent for their products."

Reflecting back on my time at IBM CHQ, I can envision a whole flock of market planners assuming that customers would buy their cloud services from IBM, and that these services would be rolled out in a manner that increased IBM revenues by stressing new cloud services over displacement of existing software and equipment. Offering cloud services that would reduce IBM’s revenues would be highly unpopular. Most likely, planners at Microsoft, Hewlett-Packard, and Oracle had similar thoughts.

Reducing expenses is clearly more attractive to the customers than to their current vendors. "We've got 50 per cent to 80 per cent of all what we spend a year tied up in infrastructure and that infrastructure isn't conferring any strategic advantage, it's just a cost of doing business," says Michael Harte, CIO of Commonwealth Bank..

“Just goes to show: whenever we think that this business is all grown up, and that all the drama is past, and that things are quieting down, something unexpected happens and the competitive balance gets turned upside down. It's just hard to imagine that when the executives at Oracle or HP or IBM looked out at the world to assess where the next wave of competition would come from, that they decided it would come from three very large and very impatient global customers,” writes Bob Evans in Information Week.

“This one's going to be very fun to watch.”

Happy Birthday, Claude Shannon, the Juggling Scientist

A man of great intellect and playful fantasy …….

“He was one of the greatest geniuses of the 20th century, the father of the bit, and the pioneer of the information age in which we live. But Claude Shannon not only stood out by virtue of his perspicacity and ingenuity; he also possessed great humor and originality to boot. The founding father of information theory spent his spare time building juggling robots, chess computers and programmable tin mice. He was often seen riding a unicycle or juggling clubs in his office.”

Shannon was born on this day, April 30, 1916. Walking around Portsmouth today, I asked some of the more senior technical people I encountered (including JV, JC, AM, and KD), about Shannon. They didn’t recognize him. Yet his work with digital information laid the groundwork for the video games, YouTube, MySpace, iTunes, and digital telephony these guys work with daily.

While I was at MIT, I heard stories that Shannon had unicycled down the Infinite Corridor, juggling as he went. I have yet to find anyone who actually saw this event, but I’m still asking. Meanwhile, I asked my friend Len Kleinrock, the Internet pioneer, one of Shannon’s first two PH.D. Students.

“When I first met Shannon in summer of 1958, it was at his home. I remember the huge library he had with a ladder on a track to reach the high books. I was sitting on his porch and he showed me the wire-tracking lawn mower he had installed. He also loved automatic chess playing machines; once in LA with him, before dinner, we went to a chess shop and bought this neat chess game which would move the pieces by actually lifting them up with an arm and moving them - if the piece was not there (when it thought it should be there) the arm went into a catatonic fit,” says Len.

The quotation heading this blog post is from the just ended “Codes and Clowns” exhibition at the Heinz Nixdorf Museums Forum in Paderborn, Germany. The exhibit showcased a selection of his inventions, ranging from the highly practical to the downright useless. The presentation set Shannon’s inventions in the context of his biography and the history of information technology

To see an excellent five minute video on Shannon, click here then select “Video about the exhibition.”

So, Happy Birthday, Claude Shannon. And, as Len Kleinrock proposes, “Let’s all raise our glasses to toast the man I admire the most in my professional life.”
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And good news: the Nixdorf Exhibits are on loan from the MIT Museum, the first time that they have been  displayed at a different location.The Heinz Nixdorf Forum exhibition has just closed but this exhibition is en route to Berlin and then Linz, Austria. There is a longer proposed itinerary among museums in German speaking countries but those venues have not yet signed contracts. The tentative plan is for the exhibition to return to the US in late 2012, according to Deborah Douglas, Curator at the MIT Museum.

AWS Launches Cloud Computing In Asia Pacific Region

Amazon Web Services (AWS) provides developers with access to in-the-cloud infrastructure services based on Amazon's own back-end technology platform, which developers can use to enable almost any type of business.  AWS continues to expand the range of services offered and the geographic areas served. AWS now offers its suite of web services from new Singapore datacenters to serve customers desiring an Asia Pacific presence

Developers and businesses can access AWS services from the new "Singapore" Availability Zones beginning today. Available services now include Amazon Elastic Compute Cloud (Amazon EC2), Amazon Simple Storage Service (Amazon S3), Amazon SimpleDB, Amazon Relational Database Service (Amazon RDS), Amazon Simple Queue Service (Amazon SQS), Amazon CloudFront, Amazon CloudWatch and Amazon Simple Notification Service (Amazon SNS).

If you haven’t checked out the list of AWS services recently, more details on each of these and other services and specific pricing for each is available at the AWS website. Take a look.

Open Angel Forum now in Silicon Valley, Thinking Nationally

Don Dodge posted some interesting updates on the Open Angel Forum on his blog today. Don attended the first meeting of the Silicon Valley Chapter and reports that the founder has plans to take the organization both national and global.


Says Don: “Open Angel Forum came to Silicon Valley last Friday night. Dave McClure and Shervin Pishevar are the Silicon Valley chapter leaders for OAF. Jeff Clavier, Andrea Zurek (XG Ventures), Cyan Banister, Pejman Nozad, Chris Yeh, and others attended the first meeting. This is an invitation only group, and these Angels all write checks. Each Angel listed some of their most recent or notable investments to start out the meeting. Some of the biggest names in tech were mentioned, and many of the current hottest startups. It is an impressive group.”

There was a lively discussion about how to make the investment process flow more smoothly, and specifically around how to structure convertible notes that are simple, fair, fast, and inexpensive to put together. Neither Don nor I favor convertible notes, so I’ll refer you to his earlier post on this topic..

And while I applaud the attempt to make angel capital more accessible to entrepreneurs, I feel a need to point out that in not charging presenters the Forum is not innovating, but is just following the tradition of most existing angel groups, including those located here in the Northeast, as I wrote earlier this year.

Says Don: “See Open Angel Forum for news on future meetings and locations. Jason Calacanis never thinks small. He wants to take this nationwide...and global.”

Stephen King, Book Pricing, Kindle, and RiverRun

I just received a press release from Amazon announcing that Stephen King’s new novella, Blockade Billy, is available now on Kindle for $7.00.

Since I’ve been following the debate about electronic vs. traditional book pricing, I checked on the Amazon site and found that a hardcover version of the novella is available for pre-order: price, $10.11, shipping date May 25.

So the Kindle version is available five weeks earlier and costs 21% less. And, of course, the book needs shipping. I have Amazon Prime, so the apparent shipping cost is free. If you already have a Kindle, the apparent cost for that is also free. The actual costs are higher of course but difficult to calculate so most users won’t bother.

Just for fun, assume that I buy 36 books in a year (one every ten days), at an Amazon price of $20.00 each. Assuming the same discount as the King novella, I would pay $720 for hardbound books and $570 for Kindle versions. A basic Kindle costs $259, or $86 annually, assuming three year depreciation. Free two-day shipping with Amazon Prime is $79 annually.

So who is the big winner: The Kindle ($656 vs. $849) by almost $200 plus earlier availability.

Who is the big loser? Alas, my favorite local book seller, RiverRun Bookstore, which needs to charge full price: $14.99 for the new novella, almost $1100 for my 36 books.

Sorry Tom, but please keep up the book signings and author readings for us.

KPCB Doubles iPhone Fund, Steve Jobs Happy, But Boston Developers Prefer Android

Kleiner Perkins Caufield & Byers (KPCB) just announced the doubling of its venture capital iFund to $200 million for companies developing applications for Apple's iPhone OS family of products, including iPhone, iPod touch, and iPad.

"Kleiner Perkins has done a terrific job at finding, funding and supporting great iPhone app developers," said Steve Jobs, Apple's CEO. "We are thrilled that they are doubling the size of their fund, along with expanding it to now include iPad developers too."

Established in 2008 as a $100 million investment pool, fourteen iFund backed companies have been supported by an additional $330 million from follow-on investors.

KPCB also announced iFund-supported companies have more than 20 applications in development for the soon-to-be-released iPad, with 11 available at first ship on April 3. KPCB noted the iPhone has created an inflection in mobile content consumption and the iPad will lead the next wave of innovation in mobile computing. The iFund is increasing its investment dollars to back entrepreneurs and build companies that focus on these areas. Particular areas of interest on iPad include entertainment, communication, social networking, commerce, health care, and education.

"Welcome to the brave new post-PC era where a swoosh of fluidity replaces the traditional mouse-bound GUI. A new, truly revolutionary platform is rare, and a prize for entrepreneurs," said John Doerr, KPCB Partner. "We expect all ventures to have an iPad strategy. We will fund many more ventures for iPad, and the iFund will accelerate their success."

In Boston, developers prefer Android. As Erin Kutz wrote in Xconomy last month, “So the iPhone may be the prettiest, the Blackberry may boast the biggest smartphone market share, and the Windows Mobile platform is, um, around, but it’s Android that’s best for developing apps. Or at least it was the Android developers who best defended their platform at the smartphone smackdown during our Mobile Madness event.”

Of course, many new applications under development will likely be available on both platforms.

IBM offers cloud for developers, not yet for mainframe developers, PayPal using it

Tuesday, IBM announced the availability of Smart Business Development and Test Cloud on the IBM Cloud, the commercial version of cloud services for software development and testing. These new services allow clients to do test and development on the shared IBM Cloud. Beta clients of these services include the Computer Software Initiative and PayPal.

At first, I found this announcement confusing. The reason for my befuddlement was that IBM previously delivered the similarly named Smart Business Development and Test Cloud, a private cloud. In this previous version, the cloud is built and managed by IBM, but located on the client premises and behind the client’s firewall.

Jennifer Knecht from IBM was nice enough to help me with a few questions.

Q. Are these cloud services available to entrepreneurs and new companies?

A. IBM is focused on delivering enterprise-class cloud services that are highly secure, flexible and reliable, and built for use with development teams. Small companies can certainly take advantage of these new services, and you'll see that we've announced partnerships with a number of small organizations and venture-backed companies today. Since the IBM cloud services are delivered in a flexible, consumption-based model, it gives smaller organizations a more predictable view into the costs they incur.

Q. Can these services be used for mainframe development?

A. George -- the initial version of Smart Business Development and Test Cloud on the IBM Cloud doesn't yet include support for mainframe development, but we're still in early stages. We'll share details about additional partners and technology support in the coming weeks and months. Let me know if you have any questions in the mean time.

From what I know today, the IBM Cloud with all of the Rational development tools available sounds like an excellent product. To me, the mainframe issue remains relevant. On the LinkedIn Mainframe Experts discussion group, this topic is arises repeatedly.

For example, just a month ago I read this post which generated 32 replies: “Being out of the work force for two and half years, is there a site where I can practice COBOL, DB2, CICS, JCL ?”

One suggestion was to download a copy of Hercules, an open source implementation of System/370, ESA/390 architectures that runs on Windows, Linux, and even Mac OS X platforms. A better solution would be to buy time in the cloud. As far as I know, no cloud available today supports mainframe development, still a superior technology for transaction processing and for massive data operations. For IBM, the opportunity should be obvious.

Celebrate St. Patrick’s Day using a free Irish translator on your smart phone

To celebrate St. Patrick’s Day and Seachtain na Gaeilge, Maithu, a small Irish company, has launched two FREE Irish language applications for the iPhone and Google Android App stores.

The 'Get the Focal Irish Translator' is a two way Irish-English, English-Irish Translator with a database of over 13,000 words and terms which live in your pocket. It is quick and accurate, can be used for completing that Irish assignment, reading articles as Gaeilge, or filling in a ‘cúpla focal’ here and there. If you're looking for help with speaking Irish, Muithu also offers a full version which contains pronunciations for all translations.

According to Kerrill Thornhill, “We launched the free version of the 'Get the Focal' app for the iPhone and Android app stores about 6 days ago, there have been over 350 downloads of the free app to date: 280 on the iPhone, over 70 on Android. The paid version of the 'Get the Focal' app was launched in September last year. There have been several hundred downloads of the paid app to date, generating reports from iTunes account is not very user friendly so that's about as accurate as I can be at the moment.”

Kerrill tells me you can download the iPhone version here. I tried it, it is indeed very easy to use.

You might try it for your next speech at South Boston’s Saint Patrick’s Day pre-parade political roast. The best received speaker on Sunday was Gerry Adams, Sinn Fein president, who spoke of the long struggle for peace in Northern Ireland, opening and closing his remarks in Irish.

“We want equality. We want peace, we would not have progress, which we’re making in the process back home, if it wasn’t for the encouragement, assistance, and support of people here,’’ said Adams, who received two standing ovations.

Go raibh míle maith agat, (Thanks a mil), to Kerrill for this free app.

Bad joke: Back when the Irish Tiger was growling loudly, some wits suggested that Ireland was indeed becoming bilingual: English and Polish. Now that the recession has reduced immigration; we might need a new joke.

Mobile Monday Boston 2009 Investment Report

I’m rushing off to the event, but here is a preview of a new report that Kate Imbach, of Skyhook Wireless, plans to present today at Xconomy ‘s Mobile Madness.


Kate, one of the organizers of Mobile Monday Boston, first unveiled the investment data at Monday night’s meeting of the group.


This report evaluates the 100 Massachusetts mobile and wireless companies that saw  venture capital funding and acquisition activity  in 2009. The data reveals that mobile has now been a billion-dollar a year sector in Massachusetts for the last two years, despite recent drops in venture funding fueled by the current economic climate. Read the report here.

Ride the Red Line, Reap the Whirlwind

It would be impossible to overstate the significance of MIT’s Whirlwind Computer on the history of technology, computer engineering, software and programming, venture capital, the development of 128 as “America’s Technology Highway”, and America’s success in the ”Cold War.”


Consequently, when Scott Kirsner asked for suggestions for “The Red Line Tour of Innovation in Boston,” I tried to reap the Whirlwind.


Eons ago, when IBM and DEC were the world’s largest computer companies, you could trace their technological successes directly back to Whirlwind.


In 1954, IBM won a contract to implement SAGE (air defense) for the United States Air Force using technology developed for Whirlwind, the world’s first real-time digital computer. IBM built fifty-six SAGE computers at the price of US$30 million each, and at the peak of the project devoted more than 7,000 employees (20% of its then workforce) to the project. This gave IBM insight and experience with computer technology advancements such as magnetic core memory, a large real-time operating system, an integrated video display, light guns, the first effective algebraic computer language, analog-to-digital and digital-to-analog conversion techniques, digital data transmission over telephone lines, duplexing, multiprocessing, and geographically distributed networks). By 1960, IBM was clearly the technological leader of the computer industry.


DEC’s connection was even more direct. DEC was founded in 1957 by Ken Olsen and Harlan Anderson, two Whirlwind engineers who wished to make small, transistorized computers (Whirlwind and SAGE used vacuum tubes). Harlan Anderson’s recently published autobiography provides substantial insight into these events: Learn, Earn, & Return, My Life as a Computer Pioneer. I very much enjoyed this book.


Venture capital of $70,000 was invested in DEC by Georges Doriot of American Research and Development Corporation. AR&D later sold its investment in Digital for approximately $450 million, certainly the best VC return ever to that point, which is why the DEC investment is considered the birth of the modern VC industry. Olsen, of course, stayed on at DEC, but Anderson moved on, investing on his own in new companies. Two people he helped get started were Bill Wolfson, who advised me when I left IBM to found Spartacus, and Dick Morely, who as co-founder of the Breakfast Club made a vast number of early stage investments and helped pave the way for today’s Angel Investors.


So Whirlwind led both to inventions and to capital to commercialize them. Programming as a profession started with SAGE, located in Lincoln MA, boosting “Americas Technology Highway.” SAGE continued in service until 1984.


MIT's Barta Building (now building N42) which housed Whirlwind during the project's lifetime is now home to MIT's campus-wide IT department, Information Services & Technology. Built in 1904, the building was restored to its original brick exterior with its distinctive gargoyles in 1997-8, It can be found at 211 Mass. Ave., Cambridge, directly across Windsor Street from the MIT Museum, which is on Kirsner’s Red Line Tour.


The information above comes courtesy of Jessica Holmes in the MIT News Office. Unfortunately, there is no public access to building N42 and I have been told that the interior has been so modified that it would no longer be recognizable.


So photograph the gargoyles with your iPhone, send us a copy, then cross the street to the MIT Museum, where Kate Porter says “We have a small display about Whirlwind here in our Mind & Hand gallery. These items will be on display through mid-June. Whirlwind will be featured in our MIT150 exhibit slated to open in January of 2011. Our archives here at MIT have plenty of materials on Whirlwind and you can access them online.”


If you would like to see more, you can find a YouTube video of Whirlwind here, and a SAGE video there.


Next stop: Where we invented time sharing and virtual machines.

Twitter Postings Up, Up, Up…..

Twitter postings appear to be growing through the roof, and some days I feel like I am receiving them all. Not so, says Kevin Weil, writing in the twitter blog.

All y’all were tweeting 5,000 times a day in 2007. By 2008, that number was 300,000, and by 2009 it had grown to 2.5 million per day. Tweets grew 1,400% last year to 35 million per day. Today, Weil is seeing 50 million tweets per day—that's an average of 600 tweets per second.

Deliveries are a much higher number because once created, tweets must be delivered to multiple followers. Weil has a nice chart that won’t copy into this blog, so take a look at his original post.

Can you make money writing Smart Phone Apps for Android?

Apparently so, says Edward Kim, who released his “car locator” application five months ago and now has sales of $13,000 a month.


“I was a really happy camper because what started as a little side-project while I was vacationing with my family, turned into a few extra bucks for lunch money every day. I feel incredibly lucky to be able to say the app has continued its upward trend and is now beyond my wildest fantasy of what could have been possible.” says Kim


Kim's Numbers:


• About 70,000 downloads of the free version

• 6,590 downloads of the paid version

• Price of the app was raised from $1.99 to $3.99

• The app steadily climbed the charts, briefly reaching a peak of #4 in the Travel category for paid apps.


So the gold rush isn’t over yet, in fact, it may be just beginning. My thanks to Kim for sharing his numbers with us. For more detail, check his post.

Developing iPhone Apps, a Virtual Workshop

Scanning the list of events for MassMobile Month, I found one that might appeal to you even if you are not convenient to the Boston area.


It’s a two hour virtual workshop covering the business of developing iPhone applications. The presenter will be Gregory Raiz, the founder of Raizlabs, who has worked on over 20 iPhone projects. It takes place on March 8. You can sign up and attend online.

The target audience for this talk includes individuals or businesses considering building an iPhone, iPad or mobile application or planning on having a product developed. No technical expertise is required; however, a familiarity with the iPhone and the app store is recommended.

I myself signed up, even though I normally dislike online tutorials.

You can sign up here on eventbrite, where the workshop is described as follows:

This workshop will cover the business of building iPhone applications. It will address the risks and the potential rewards of producing an application and having it for sale in the iTunes App Store. The workshop will cover the following aspects of the business including:

 • How to pick an application concept

• What makes an application successful

• Building a business vs. building an app

• The highs and lows of success

• Getting noticed in a sea of 180,000 apps

• Apps that compliment your core business

• Pricing your application and App Store business models

• Designing and developing - what to expect

• Is your app social? (Email, Facebook, Twitter, etc.)

• Costs of building applications

• Marketing app basics

• Application Rejections

• Resources and Tools

• Beyond the iPhone (Android, Blackberry, Web)

Mobile Madness, March 9, Should Attract Both Inventors and Investors

Full details describing Xconomy’s next big event, Mobile Madness: The New Future of Computing, are now available online, reports Chief Correspondent, Wade Roush.



Headlining the afternoon are keynote speakers from leading global, national, and regional organizations: Jhonatan Rotberg, executive director of the MIT-based Next Billion Network, will talk about the role mobile technology can play in solving social and economic challenges in the developing world; and Kate Imbach, Co-Founder & Organizer at Mobile Monday Boston & Silicon Valley and vice president of marketing at Skyhook Wireless, will walk us through the latest facts and figures on venture investment in the mobile technology sphere in New England (full agenda here).


Of special interest to Angel and VC investors will be a Mobile Showcase featuring 10 mobile startups. Presenters will give one-minute lightning presentations, and then the whole audience will adjourn to the lobby area at Microsoft, where representatives of the showcase companies will be available for one-on-one conversation around tables supplied with a variety of demos and handouts. Those presenters include Apperian, Appswell, bitHeads (from Ottawa, Ontario), Illume Software, the Public Radio Exchange, Roam Data, Rummble (from the United Kingdom), Sand9, SparkCloud, and WherePhone.

You can register here.

Angel Investor Groups, Still Here, Still Helpful, Still Free

As someone who has had the rare opportunity to know personally many of the leading Angel Investors active today, I have been distressed by some of the comments I’ve read lately disparaging angels. To be fair, many are also disparaging VCs. And many of the irritating posts are on blogs and tweets, not widely read, but some of this nonsense has even made its way into the NY Times.

The catalyzing issue lies in charging large fees to entrepreneurs.

To start, you might look at a post this Monday by Dan Primak in his widely respected and circulated newsletter, PEHub.

Says Primak: “Last week, a Silicon Valley investor named Hugh Sloan III came across a startup that had received a minor award from Microsoft. He emailed the company founders, saying he had “3 ex Google angels and two Tier 1 venture funds who would be looking at this opportunity with me.”

“Sounds great, except there was a giant catch: Sloan wanted $7,500 up-front, in order to set up the meetings. No refunds if the investors didn’t offer term sheets.”

You can find Dan Primak’s article, plus comments including replies from Hugh Sloan III, right here.

Primak is following up on an earlier post by Jason Mendelson, “Watch Out Boston, A Rip-Off is Coming to Town”. Jason is concerned by the following event:

• Name: Young Startup Ventures

• Date and Location: April 21st, at the Microsoft New England Research & Development Center in Boston, MA.

• Cost: $4,500.

Quoth Mendelson: “Now unlike some other events like this, there are a list of credible VCs attending and it is being held at Microsoft. This makes it all the more worse. I bet that some are unaware of the payment mechanism.” Read the comments on this post also. 

So what’s my gripe? I think Primak and Mendelson, as well as Jason Calacanis, who has been leading the charge against these practices for some time, are doing a good job both for us for us and for the entrepreneurs. The problem is that some reports take these isolated instances and turn them into a trend. Should you doubt me on this, read “Angel Investors Become Less Available” from the NY Times.

  

To check what’s really going on, I  contacted some of the active and respected Angel Groups here in the Northeast. My findings: fees to entrepreneurs are rare or de minimus.

  

The four oldest active Angel Groups in the Northeast do not charge. These are: The Breakfast Club, Common Angels, eCoast Angels, and Walnut Group. Others with no charge include River Valley, Angel Investor Forum, Boynton Angels, Hub Angels, Cherrystone, Beacon Angels, Launchpad, ECS Angels, Maine Angels, Rochester Angel Network,  Race Point Capital, Bay Angels, Granite State Angels, and North Country Angels. One group, Golden Seeds, charges $100 to apply.

I also received a note from Marianne Hudson, Executive Director of the Angel Capital Association, who writes “basically ACA is in favor of no or very small fees, as well as transparency to the entrepreneur if there are fees.”

If I can determine this in a day, imagine what the NY Times could have done to encourage entrepreneurs to seek out ethical angel groups if they had spent some time researching this topic.

If you want to contact any of the groups mentioned in this post, most are listed in the ACA Directory, along with many other groups throughout North America.

My conclusion: reputable and established Angel Groups are not charging entrepreneurs any significant amount to apply or to present to the group. This means a lot of experienced and successful people are contributing their time as well as their capital to launch new companies and build our economy.

Why do they do it? I’ll quote my friend Mort Goulder, now deceased, co-founder of The Breakfast Club, one of the first and foremost Angel Investment Groups in the World. “Here’s why I do it. I figure this system we have, this start-up economy, has been really good to some of us, like you and me. I feel in return we have the obligation to see that the other guy gets his chance too.”

Conflict alert: I am co-founder of the eCoast Angels Investment Network, an achievement of which I am particularly proud. With special thanks for prompt responses to James Geshwiler, Paul Silva, Charles Cameron, Liddy Karter, Chris Golden, Peter Dorsey, Joe DeMartino, Lucinda Linde, Bill Swiggart, Ham Lord, Charles Sidman, Ralph Wagner, Marianne Hudson, Jean Hammond, Christopher Mirabile,  Jim Senall, Fred Wainwright, Corey Silva, and Robert Lamkin.

The chip wars are about to become even more bloody...

In this next phase, the chip manufacturers fight a "Battle Royal" to supply the silicon for one of the fastest-growing segments of computing: smartphones, tiny laptops and tablet-style devices.


The NY Times analyzes the match. “The fight pits several big chip companies — each trying to put its own stamp on the same basic design for mobile chips — against Intel, the dominant maker of PC chips, which is using an entirely different design to enter a market segment in which it has a minuscule presence.”


Intel remains the last mainstream chip maker to both design and build its own products, which go into the vast majority of the PCs and servers sold each year. Most other chips are built by a group of contract manufacturers, based primarily in Asia, to meet the specifications of other companies that design and market them.


Intel’s Atom line of chips, used in most netbooks and now coming to smartphones, can cost two to three times as much as competitive chips. In addition, the Atom chips consume too much power for many smaller gadgets.


Intel executives argue that consumers will demand more robust mobile computing experiences, requiring chips with more power and PC-friendly software, both traditional Intel strengths.


“As these things look more like computers, they will value some of the capabilities we have and want increasing levels of performance,” said Robert B. Crooke, the Intel vice president in charge of the Atom chip.


I tend to be with Intel here, but I fear they may be making a dangerous mistake. The original Atom chips could support Intel’s Virtualization Technology. Those features seem to be missing from the newest Atom chips, making it unlikely that you can use virtual machine technology on a smartphone to make that phone a full participant in Cloud Computing.


…….
Interestingly, articles from the NY Times are not available online unless you are a subscriber. But the same information is sometimes posted on the NY Times blogs, which are at present outside the “paywall.”

Find Ashlee Vance's article about the forthcoming battle here. You might also take a look at a blog post by Nick Bilton with a wish list of features for future cell phones A second advantage of reading the blogs is that you can also read the comments; the wish list attracted quite a few.

Vanishing Public Companies Shrinking Silicon Valley?

Very occasionally I find a blog post that provokes sufficient thought that I want to reproduce it in its entirety, hoping that a) the original author will be flattered rather than offended, and b) the readers of this blog aren’t reading exactly the same things I am.

  SiliconBeat, a blog from the San Jose Mercury News, postulates that the reduction in the number of public companies has led to a shrinking of Silicon Valley. I myself don’t have the data or resources to perform a similar study for the Boston area, but I would be delighted if someone at the Globe or Xconomy does.


The post by Chris O’Brien: Vanishing Public Companies Lead To The Incredible Shrinking Silicon Valley


“One of the most significant trends I’ve been watching over the past decade is the dramatic drop in public companies in Silicon Valley. Naturally, that number was artificially inflated during the dot-com bubble when it reached 417 in 2000. For our purposes, Silicon Valley includes San Mateo and Santa Clara counties, and the southern half of Alameda County.


“But the number of public companies has dropped for nine straight years now. Even when IPOs briefly reappeared in 2006 and 2007, they weren’t enough to overcome the net loss of public companies through acquisitions or bankruptcy.


“In 2008, the number had fallen to 261. We just updated our records and the latest figure is 241.


“That’s not just less than the dot-com era, that’s well below the 315 public companies the valley had in 1994 when the Mercury News started keeping track.


“Here’s why I think this is a big deal.


“First, it points to the massive consolidation at the top of the pile. The biggest companies continue to get bigger, in large part through acquisitions. This includes Hewlett-Packard, Oracle, Cisco Systems and now Google. We’re known for our start-ups, but increasingly the valley landscape is becoming dominated by these big enchiladas. That’s bound to have an impact on the rate of innovation.


“Next, the IPO remains a lost dream. Yes, it briefly reappeared last decade, but even in the good times last decade, they were nowhere near the pace of the early and mid 1990s. The IPO is dead, and it’s time to let go and rethink the way innovation gets funded and rewarded.


“Increasingly, venture capitalists have to look to acquisitions as the best hope for an exit. And these simply don’t produce the returns that an IPO homerun does. That means a big shakeout in the VC community is inevitable. Though it will unfold over many years, in a kind of slow motion implosion.


“Each year, we publish our SV150 section that looks at the top 150 public companies in the valley. At the pace we’re going, by the end of this decade, we won’t even have that many public companies.


“The valley has always managed to adapt to such fundamental changes. But I think the continued disappearance of public companies will pose one of the valley’s greatest challenges. If the valley remains on top in 10 years, it will be because the innovation economy looks far different than it does today.”

March is Mass Mobile Month: Celebrating New England Innovation

Its official, March is Mass Mobile Month in Massachusetts with a mind boggling array of events planned.  That’s Mass as in Massachusetts, but it’s also mass as in huge, because it’s going to be a gigantic month of mobile-related activity around town and around the world. The list of events is too long to include here—which is exactly why our friends at Xconomy have created the Mass Mobile Month website, a clearinghouse for information related to the all of the mobile conferences, camps, seminars, showcases, and networking events going on in New England.

Wonder what makes it official? Check today’s post by Wade Roush on Xconomy Boston for the official word.

I have signed up for two events already.

First is the Xconomy Forum: Mobile Madness, scheduled for Tuesday, March 9, 2010, 1:30 - 6:00 pm at Microsoft NERD in Cambridge. From the invitation by Bob Buderi:

“As computing enters what many analysts agree is its fifth great historical cycle (after mainframes, minicomputers, PCs, and the desktop Internet), New England companies are poised to lead in many areas--including mobile application development, infrastructure, and advertising. But the platforms and markets are evolving fast. At Xconomy's Mobile Madness conference, keynoters and panelists from the region's leading mobile technology companies will help participants make sense of the chaos and separate the solid innovation opportunities from the hype.”

Confirmed Speakers & Participants Include:
Wendy Caswell, CEO, Zink
Walt Doyle, CEO, uLocate
Chuck Goldman, CEO, Apperian
Will Wang Graylin, CEO, Roam Data
Kate Imbach, Vice President, Marketing, Skyhook Wireless; Organizer, Mobile Monday Boston
Mark Lowenstein, Managing Director, Mobile Ecosystem
Dan Olschwang, CEO, Jumptap
Greg Raiz, CEO, Raizlabs
Jhonatan Rotberg, Executive Director, Next Billion Network
Jake Shapiro, Executive Director, Public Radio Exchange
Dan Sullivan, Founder, Appswell
Mark Thirman, Vice President, Business Development, Illume Software

I have also signed up for the Tech Tuesday mobile event which immediately follows the Xconomy forum and showcase reception. Tech Tuesday requires separate registration.

So it is official, Mad Mobile races the March Hare,  in Mass., in March. Be there.

Nicera, a New Virtualization Company to Follow

VMware’s founder Diane Greene has resurfaced, writes Alessandro Perilli in Virtualization.info. Greene appears as an investor in a startup named Nicira, along with Andy Rachleff, Partner at Benchmark Capital.


In July 2008, the VMware Board of Directors removed founder Diane Greene as CEO. Greene was offered another position that she declined, leaving the company that she created and led through one of the most impressive IPOs in IT history.

Nicira, founded in early 2009, is in stealth mode at the moment but its website reveals its mission is to virtualize networks. The company is managed by Steve Mullaney, who comes from Palo Alto Networks and Blue Coat Systems, where he was Vice President of Marketing.

According to Rachleff, Nicira appears to be working on a “Network Operating System” or NOX.

A number of employees, along with Stanford and Deutsche Telecom researchers, published a couple of research papers (one and two) about this topic in late 2009. The team advocates the need for a centralized programmatic interface to observe and control large scale networks. The NOX would provide such API while 3rd party vendors would build applications that leverage the API.

I'm looking forward to reading these technical papers and on learning more about Nicira.