Startable – Healy Jones’ & Prasad Thammineni’s Blog

Wait a second!

The MoneyTree/PWC Q2 venture capital dollars by region shows Boston still on top over NYC for dollars invested in Q2 2011!

NYC vs Boston VC investments

This does not mesh with the data from CBinsights that was released just a few days ago.

I’ve reached out to my contact at CBinsights to see if he has any info on this. I bet there are just some differences in how the data is collected. But in the PWC data above New England is quite a bit over NYC.

At the end of the day this doesn’t really matter too much as long as all the regions software investments are up. I don’t believe that this is a zero sum game, and there can be multiple regions outside of the valley that have thriving internet hubs. NYC and Boston should both be among these. I dream of a interconnected Northeast coast internet hub from NYC to Boston along the Acela route… it makes sense give how connected these two regions are that startup talent, dollars and ideas flow along the coast in a giant melting pot of new startups, people and exits.

Lots of reports of the end of Massachusetts as a startup hub due to the fact that NYC raised more venture funding in Q3 2011 than Boston.

First of all, I am not upset that New York is becoming a real startup hub. Let’s got those technologists out of the backrooms of hedge funds and out there making some awesome products that people can actually use!

Secondly, I don’t think that there is a zero sum game here; if more and more companies do well there should be enough capital to go around.

Third, Mass has been huge in healthcare investing and has been less than stellar in Technology investments for a while now. As healthcare venture capital investments have dropped pretty agressively it makes sense that Massachusetts would dip.

IMHO, the thing that Massachusetts needs now to get it’s tech/internet mojo back is to have a few major exits take place – followed by the employees of those companies starting the next generation of startups + the local VCs recycling money back into the area.

I see some great companies in Boston that are ripe for doing just this. I hope that we see success with a few of them and can get the startup juices flowing again. I feel that the NYC to Boston Acela line could be the next startup super cluster, and I’d like Boston to pull its weight. Check out the CBinsights report for all the details; it’s the source of these charts.

I’m pretty excited about a new partnership my company has that just launched. OfficeDrop is working with Nuance’s PaperPort desktop filing system to bring the newest version of PaperPort, PaperPort 14, to the cloud.

The team here at OfficeDrop was able to connect our APIs to PaperPort 14′s desktop client, making it simple to right click any folder from within PaperPort 14 and automatically sync all files to the cloud. If you include the mobile apps we developed this means you can right click a folder and the text search, browse and share the folder and it’s contents from your phone. It’s pretty cool and the tech press seems to be getting it. You can buy PaperPort 14 at paperport.com, where you can also sign up for a free PaperPort Anywhere account. And the mobile apps are here:

• PaperPort Anywhere iPhone and iPad App
• PaperPort Anywhere Android App

Obviously preparing for this was a ton of work, which is why I’ve been totally silent on the blogging front. Hopefully now that we are launched I”ll have time to get back to posting more frequently!

Below is the press release by Nuance talking about PaperPort Anywhere.

Nuance Launches PaperPort Anywhere Cloud Service

Making it Easy for Millions to Organize, Access and Share All of Their Paper and Digital Documents, Anywhere and Anytime

BURLINGTON, Mass., August 2, 2011 — Nuance Communications, Inc. (NASDAQ: NUAN), a leading provider of speech and imaging solutions, today introduced PaperPort® Anywhere, a new cloud-based service that makes it easy to organize, access and share documents from nearly any PC and mobile device. PaperPort Anywhere lets users manage and access their documents in the cloud using web browsers, as well as using free apps from Nuance for Apple® and Google® Android® mobile devices.

The service uses the market-leading Nuance OmniPage® OCR (optical character recognition) engine to automatically create searchable documents from scanned and camera-captured documents, as well as faxes, making paper content as easy to search and find as digital documents. As a result, users can organize, access and share all of their document content on PaperPort Anywhere.

“There is a reason that recent surveys show over 51% of people still use paper files – it is in large part because current cloud services treat paper content as an afterthought,” said Robert Weideman, vice president and general manager for the Nuance Document Imaging Division. “PaperPort Anywhere goes further than other services by closing the content gap between paper and digital documents – making it easy to scan to the cloud, improving the way users manage both their scanned and digital documents, and by making cloud access easy and convenient.”

PaperPort Anywhere also integrates with the new release of Nuance PaperPort 14 for Windows®, the world’s most popular scanning and document management application for the PC, which was also announced today. PaperPort 14 provides automatic synchronization of Windows folders and files with PaperPort Anywhere. It also adds conversion of scanned and PDF documents into fully formatted word and spreadsheet files that can be edited on Windows, the Macintosh and through cloud services such as Google Docs and Microsoft Office 365. PaperPort 14 provides robust PDF capabilities, including the ability to create PDF from practically any application, and includes PDF-MRC, which creates scanned files that are up to eight times smaller than scanned PDF files without compression.

PaperPort Anywhere is valuable to anyone that works with documents, including the over 20 million registered users of Nuance desktop applications, and users of the more than five million seats of PaperPort that are deployed each year. PaperPort Anywhere includes free apps for Apple iPhone, iPad and Google Android devices, and is free for up to one gigabyte of searchable storage space. PaperPort Anywhere subscription plans include $9.99 per month for 10 gigabytes and $24.99 per month for 50 gigabytes of storage space.

PaperPort Anywhere Key Features and Benefits

PaperPort Anywhere makes it easy to organize, access, and share any document – both paper and digital – anywhere and anytime. Key features and benefits include:

• Organize All Your Documents in the Cloud. PaperPort Anywhere is more than cloud storage – it provides a better way to organize and use your documents. PaperPort Anywhere’s thumbnail and clip views of paper and digital documents are key features that help you quickly organize documents.
• Search and Find both Paper and Digital Documents. PaperPort Anywhere is powered by the Nuance OmniPage OCR engine, which provides the highest levels of accuracy for scanned documents and image PDF files, such as those from fax services. The best OCR means users can find indexed paper documents just as they do Word and spreadsheet files.
• Access and Use, Anywhere and Anytime. PaperPort Anywhere is accessible through any web browser at www.PaperPort.com, the web gateway to PaperPort Anywhere cloud services. Nuance also provides free apps for the Apple iPhone®, iPad® and Google Android devices, and supports Microsoft Windows through PaperPort 14.
• Share and Collaborate. PaperPort Anywhere makes it easy to share links to files stored on the site. The service also supports secure and permission-based emailing of files into PaperPort Anywhere accounts, making it easier than ever to collaborate and share documents with others.
• One Click Scan to Cloud. Only PaperPort Anywhere integrates with PaperPort 14 – the world’s most popular scanning and document management application for the PC. The combination results in unmatched document productivity and convenience.

Pricing and Availability

PaperPort Anywhere with up to one gigabyte of searchable storage is free. PaperPort Anywhere Premium with up to 10 gigabytes of storage is $9.99 per month and $24.99 a month for 50 gigabytes of storage. For additional information on PaperPort Anywhere visit www.PaperPort.com.

About PaperPort Anywhere

PaperPort Anywhere is a new, innovative cloud service from Nuance that makes it easy to scan, organize and share documents – anytime, from anywhere. PaperPort Anywhere is powered by OfficeDrop. It delivers enhanced search-indexing capabilities using Nuance OmniPage OCR.

Nuance Communications, Inc.

Nuance Communications, Inc. is a leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.nuance.com.

Trademark reference: Nuance, the Nuance logo, and OmniPage and PaperPort are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other company names or product names referenced herein may be the property of their respective owners.

# # #

Media and Industry Analyst Contact:

Jennifer Shelgren

Nuance Communications, Inc.

Tel: (781) 565-4758

Email: jennifer.shelgren@nuance.com

Cool news today, and props to BostInno for breaking the story on Performable being bought by Hubspot.

This deal makes sense if Hubspot customers are looking for deeper analytics, like the ones offered by Performable. It also combines a large and well known engineering team with Performable’s kick butt dev team. It’s good to see that Hubspot is putting some of that monster Series D money to good use.

The only issue I have with the acquistion is that it puts two of the top Boston area seed investors under the same roof. Dharmesh Shah and David Cancel are two really aggressive angel investors… hopefully them being in the same company won’t cause their individual deal flow to decrease as they spend more and more time together…

It is becoming a big deal in the Boston ecosystem when another VC decides to leave “Mount Money” aka Winter Street in Waltham for trendier digs in Cambridge. Scott Kirsner has a recent post on ATV preparing to move to Cambridge to be closer to the startup action.

I don’t think it’s a big deal if the remaining venture capitalists in Waltham stay there.

Boston/Cambridge doesn’t need more venture capitalists downtown. What is one of the biggest problems for startups trying to operate on the Red Line? Rent. It’s crazy expensive to find decent offices in Cambridge. Who doesn’t mind paying too much for rent? VCs and their service providers like accounting firms and lawyers. There is a really limited amount of space in Cambridge. We don’t need it taken up by venture capitalists. Startups will have to move to the burbs if rents continue to climb.

Having the local startups clustered along the Red Line is really important. A huge amount of knowledge sharing happens due to this proximity. For example, my CTO gets together with other CTOs at least once a month. I get together in the evenings with other startup folks pretty regularly. This wouldn’t happen if everyone was out in the burbs; or at least would not be as easy for startupers who live in the city (note that most senior VCs tend to live in the suburbs).

Scott highlights a very cool story about how Zuckerberg had to get a cab to get out to see Battery Ventures when they were considering raising capital. How do you think Zuckerberg got to the VCs on Sand Hill Road in Palo Alto? It’s not anywhere near public transportation. Getting there is a total pain in the ass if you live in the city, unless you live along 280 (I know because I did that commute for almost three years.) In fact, Sand Hill is a lot like Mount Money, with the VCs in their own little world, surrounded by investment banks, law firms, etc. There are a few startups on the street, but it’s really expensive. (Stanford is really close, which is a major advantage.)

Sand Hill has another advantage, in that it’s in the geographic center of the startup scene in the Bay Area, in between San Francisco and San Jose. I guess Waltham does NOT have that going for it. But being active in the startup community still requires the California VCs to get out of their offices and visit with startups and attend events. Boston area VCs can achieve the same thing if they get out and about and attend local startup events. If Mount Money VCs feel cut off from the action, I bet it has less to do with their geographic location and more to do with their attitude. You see a few of the same VC faces at most of the “cool” events, and there are some venture capitalists who make an effort to speak various startup panels. Instead of encouraging Waltham VCs to move to the city we should be encouraging them to get out of their offices more often.

What is going on with the Massachusetts technology VC scene? While the rest of the US seems to be recovering nicely from the VC nuclear winter of death, Boston is lagging. Check out this chart of quarterly VC technology deals from Q4 2009 to Q1 2011 by CBInsights:

Is it just me, or is it odd that the dollar total for MA dropped by over $100 million while New York City increased by well over $150 million? Those are big swings, and I’d hope that the two would move in tandem – but obviously they are not!

The deal total for MA has held pretty steady for the past few quarters, ranging from 39 to 43… but NYC is doing a great job crossing the 50 deals per quarter barrier for the past two quarters.

I like to think of the two ecosysems as pretty highly correlated, with people moving back and forth or traveling back and forth on Acela pretty regularly. For example, OfficeDrop’s investor is from NYC but he’s up in Boston one a month and is open to making investments anywhere along the Acela train line. I know for a fact that Boston VCs are actively looking in NYC for investments – but are they still looking in Boston?

Something doesn’t quite jive here for me. I’m seeing a ton of interesting seed stage internet companies in Boston getting traction and funding. But are we missing out on the current internet bubble?

Checkout the CBInsights post here.

CB Insights has some interesting data on NYC vs. Massachusetts technology venture capital. The picture is worth 1000 words…

BostInnovation is one of the Boston area teams that I hope will really help get Boston back on the internet innovation map. I want to give them a shout out for a great party they hosted last week – I not only met some great local startup folks, but had a very good time and was impressed at the massive turn out.

Secondly, they were just kind enough to mention OfficeDrop in their technology for tax planning post! Thanks BostInno!

Dharmesh Shah recently made it abundantly clear that the developer hiring wars have reached the East Coast in his massive bounty for new developer hires at his company, Hubspot.

I just heard of an interesting NYC program called the Turning Fellowship that aims to bring new developer talent to New York City. A couple of venture firms appear to be spearheading this effort; PE Hub quoted one of them as saying, “Entrepreneurs complain about a lack of talent in New York City.” No kidding! There is a lack of great development talent everywhere!

Anyways, the program sounds like a good idea, as it will provide students with programming skills paid internships at NYC startups. This could provide very positive experiences to students looking to gain some real-life skills (and help them figure out if they want to join startups when they graduate too!)

Anyone know of other programs like this in Boston?

NextView Ventures

NextView Ventures, a Boston are micro-VC/seed fund, has just launched their website. Rob Go, Lee Hower and David Beisel have a solid group of entrepreneur advisors, which I think is probably the most impressive aspect to this new fund. (And I’d highly recommend any of these three to any startup that would be lucky enough to get a term sheet from them.)

Scott Kirsner of the Boston Globe has a great article that highlights NextView and some of the other new local seed funds. One of the most important attribute of these new funds is the fact that they are willing to help unproven, young entrepreneurs get their first startup off of the ground. This is one of the Boston area’s biggest holes – I hope the new funds are able to fill it and are able to encourage other VCs to fund young founders and end up helping keep startups in Boston.

And local seed funds – don’t forget to report your local investments to the databases that keep track of venture investments! We want to make sure everyone knows that the Boston startup community is healthy!