What will be the future of innovation in New England? On December 5, at the MIT Media Lab, there was a panel discussion on this topic, run by Xconomy.com, which publishes a “business technology blog” with special focus on New England, especially Boston and Cambridge.
The panel was moderated by Michael Greeley, a general partner at IDG Ventures and president of the New England Venture Capital Association. Panelists were Helen Greiner, chairman and co-founder of iRobot; Frank Moss, director of the MIT Media Lab; and Christophe Westphal, CEO of Sirtris Pharmaceuticals, which is developing drugs to treat diseases of aging, such as diabetes and cancer.
(I am basing the following on my own scribbled notes, so I may have made some mistakes; if so, I apologize.)
Greiner explained that iRobot makes their money by selling actual robot products, plus some government research contracts. They consider themselves very innovative. They make five home robots (the best-known is the Roomba vacuum cleaner) as well as military robots (primarily for dealing with roadside bombs). She is very interested in making sure that robotics continues to thrive in New England, and to that end encourages partnering among other robotics companies, academic research laboratories, and related organizations, e.g. through the Mass Technology Leadership Council. When asked about how the area can get involved in “clean” technology, she didn’t express much interest, saying that “clean” technology can happen anywhere (and she took a swipe at venture capitalists as “sheep” or “lemmings”), whereas we ought to focus on where we’re already leading in Boston, such as robotics.
In response to a question from John Landry of Lead Dog Ventures, she explained that iRobot did not raise any external capital until their products were on the market. They had trouble finding funders who believed in their concept, but finally found some “foresighted” VC’s. She said that it was hard to get the best technical people, and we need more. She cited a study from Georgia Tech saying that about 2/3 of Roomba customers give their Roomba’s names. She was in Japan recently to see robotics technology there, and while the Japanese are very strong on industrial robots, they’re “disappointing” in other areas of robotics. On a personal note, she recommended the Axon Labs SleepSmart device, which she says helps her sleep better (she is also an investor in the company), and she said that she’s taking up kite boarding.
Westphal talked mainly about the biotech industry. His company, Sirtiris, is developing medicines based on Resveratrol. You might have heard of it; it’s found in red wine, although you’d have to drink 1,000 bottles to get the theraputic effect. They’re targeting diabetes first but suggesting that it will help with heart disease, cancer, and Alzheimers. He feels that the Boston area is way ahead of the San Francisco area in bioteach, and claims that the San Francisco people agree. He credits Harvard and MIT for being major influences, and he said that every leading aging researcher is in the Boston area. He feels that a biotech company needs to be physically close to any university researchers they work with.
To a question about how companies can get to the $1 billion level, he cited several biotech companies that already have: Biogen, Vertex, Millennium, and the Genetics Institute (before it was bought). He thinks his own company could reach that level, since so many people would be interested in their product.
He feels that “clean” technology will be highly regulated, lose a great deal of money when started (i.e. it will take a long time before the products come out), and the only “exit” will be an IPO or purchase by a large company, all of which is similar to the biotech industry.
Frank Moss mainly talked about the MIT Media Lab’s business model. When the lab was started, Jerome Weisner and Nicholas Negroponte anticipated that government funding for research was diminishing (as it is now), so they set up the Media Lab to by primarily funded by industry. His job is to keep the model going and keep bringing in funding. However, corporations are now more reluctant to pay for research, and are looking for return on investment.
He is now looking to change the model. Although it was never a goal of the Media Lab to create companies, there have been about a hundred spin-off companies so far (he mentioned Guitar Hero 3). As he sees it, venture capitalists are “waiting by the back door” for people to emerge with new ideas, ready to form companies, “grazing the intellectual property”. What Moss would like to do is get venture capitalists “in the front door”, forming relationships with students up front, in exchange for some funding, which is says would be only 1/10 of one percent of the VC investment.
Moss said that he thought there was too much anxiety about creation of $1 billion companies. The important thing is to have companies that will stay in the area in generate people suitable to be executives. He feels that there is a real problem that there is not a critical mass of companies that stay here and create talent.
During the discussion of “clean tech”, Moss mentioned the Clean Car, a stackable electric two-passenger city vehicle, which has a feature called “Wheel Robots”. Greiner said, “Oh, if it has robots, I’m for it!”
One of the questioners was from the Cambridge Innovation Center. I had never heard of that, so I looked it up when I got home. It’s in Kendall Square (the part of Cambridge where MIT is, and where I work), at One Broadway, with 150 customers on 7 floors. They offer office space and services to start-up companies (mainly technology oriented). They provide refreshments, conference rooms, reception, Internet connectivity, phones, a mail room, server space, and even social events with the other tenants.