If you’re still in search of a New Year’s resolution, here’s one you’re free to borrow from me: Become a more active and self-reliant manager of your retirement investment accounts, using some of the affordable new tools available online.
This week I’ve been exploring two of the leading services, Jemstep and Personal Capital. After just a few sessions with each, I’m feeling a much greater sense of mastery, knowledge, and control when it comes to my 401(k) accounts and other investments. I may even have identified some changes to my portfolio that will improve my returns down the road—all without spending a lot on fees. And that’s the whole point of these tools, which are available for far less money than you’d pay to a broker or a traditional investment advisor.
“We are targeting those who either are, or are aspiring to be, self-managed investors,” Jemstep president Simon Roy told me in an interview last month. As a confirmed tightwad, I love the idea of DIY investment management—but I never felt I had enough information to make smart decisions about where to put my money. Now Silicon Valley startups like Jemstep and Personal Capital are using the power of statistics and software algorithms to provide the kind of data-driven advice that, in the past, was accessible only to the managers of big brokerage funds.
For the average consumer, retirement planning presents two big challenges. The first one, of course, is saving anything at all. In a slack economy marked by chronic unemployment, it’s hard for many people to make ends meet in the present, let alone think about their retirement years. And let’s face it—we aren’t a nation of savers. In American consumer culture, most of the messages we get from big institutions promote spending as if it’s our patriotic duty.
Most financial firms, though, say that to retire comfortably, you should squirrel away eight to 12 times your expected final-year salary. So if you want to retire at age 65 and you think your gross annual income at that point will be $100,000, you should plan to have a cool $1 million in the bank. But here’s a shocker: half of all American workers have retirement nest eggs amounting to less than $25,000. Even if Congress finds a way to keep Social Security healthy past its expected insolvency date of 2033, that’s a gap that government benefits will never close.
For those who have managed to save a little more, there’s a second obstacle. If you’re like most people today, you’ve worked for multiple organizations in the course of your career, and you’ve got 401(k) or IRA money stashed away across several different investment firms—four of them, in my own case. It can be pretty complicated to keep track of all those accounts, and to make sure you have a portfolio that’s balanced overall, given your investment goals and your tolerance for risk. But if you want personal help from an investment professional, you need to put at least $500,000 on the table. Any less, and the fees just aren’t worth a broker’s time.
“The minimum assets required for a Goldman Sachs or a Merrill Lynch or a Raymond James to be interested in you, and to compensate their brokers, has gone from $20,000 up to $500,000, and for some of the elites, $5 million or $10 million,” Roy says. “What used to be a broad-based service, accessible to the average American, is increasingly available only to the top 10 percent of society.” It’s not that a Goldman or a Merrill won’t let you open a smaller account, Roy says—it’s that they’ll simply stash the money in computer-managed accounts, in which case you might as well manage it yourself.
Roy says that’s why Michael Blumenthal, a South African native with experience at big U.S. brokerages, founded Los Altos, CA-based Jemstep in 2008. Roy, another South African, joined the following year. The main point of the service is to evaluate your existing retirement portfolio and suggest changes that will optimize your risk/return ratio, balance your investments in a way that minimizes the fees and future taxes you’ll owe, and, in the end, increase your post-retirement income.
“What Jemstep is designed to do is take the complexity that most of us have to live with—all of the different accounts, brokerage firms, spouses and partners, et cetera—and make sense of it and deliver a simple direction as to what to do, so you can get on with your life,” Roy says.
The first step when you sign up at Jemstep is to specify your age, your income, your expected retirement age, and your appetite for risk—from conservative to aggressive, defined in terms of the percentage swings in account balances that you could tolerate without throwing yourself out a window. Then you connect the service to all of your financial accounts. In that sense, it’s similar to Quicken, Mint, Check, and most other financial software and apps—and, unfortunately, just as error-prone. In my experience, account access is the Achilles’ heel for most personal-finance services. The problem isn’t just that you have to dig up and type in the usernames, passwords, and secret hints for each of your investment accounts—it’s also that each investment firm labels its funds in a slightly different way, which means it’s difficult for a service like Jemstep to ingest it all cleanly.
In my case, Jemstep connected to the wrong real estate fund at TIAA-CREF, one of my investment firms, and ended up undercounting my assets by tens of thousands of dollars. I had to input the correct data manually. At another firm, Transamerica Retirement Solutions, Jemstep couldn’t connect at all. Such issues make what product developers call the “new user experience” pretty painful, and I’m guessing that most personal-finance startups lose a lot of potential customers this way.
But once you’re past that step, the fun and useful stuff begins. According to Roy, Jemstep’s patented ranking algorithm analyzes 50 attributes for each fund in your portfolio (it’s mainly geared toward analyzing mutual funds and exchange-traded funds, or ETFs, rather than individual stocks). It figures out things like which funds match your risk preferences and which don’t, based on their asset class and historical performance; which funds have reasonable fees, and which ones are probably overcharging; and whether your holdings are intelligently allocated from a tax perspective (for example, high-growth assets such as commercial real estate investment trusts should be held in tax-free accounts). It checks which alternative funds are available to you, based on the firms where you have accounts, and comes up with new ways of distributing your assets.
After running 500 simulations, each assuming different portfolio mixes and market conditions (it’s called a Monte Carlo analysis), Jemstep offers an action plan for reallocating your assets. In my own case, Jemstep concluded that I’ve got too much money in U.S. stocks, and that I should move a bunch of it into international stocks, for the sake of diversification and reduced volatility. The recommendations are personalized, meaning they would have been different for someone with a different ability to take risk due to their age or marital status (I told Jemstep my risk tolerance is “moderately aggressive”). “Think of it as Morningstar meets eHarmony,” Roy says.
I spent a couple of hours generating my action plan on Jemstep, but the process can go much faster. “The goal is to move someone from ‘How old are you?’ to “You should buy this and sell that’ in 10 to 15 minutes,” Roy says. Jemstep isn’t a broker, so to move your money around, you have to visit the sites of your investment firms and execute trades—but Jemstep makes that part easier by suggesting which specific funds you should switch to, given the options within the fund families sponsored by your current and past employers.
Jemstep operates on a monthly subscription plan. The fee you pay to see its asset-allocation recommendations depends on the value of the assets you’re tracking. Accounts up to $25,000 are free. Accounts from $25,000 to $150,000 cost $17 per month; from $150,000 to $300,000, $30 per month; from $300,000 to $600,000, $50 per month; and above $600,000, $70 per month. Jemstep instituted the paywall about seven months ago, and so far it hasn’t scared away many clients, according to Roy. Users want ongoing access to the site’s tools because they like to keep tabs on their portfolios over time and make adjustments in response to changes in the market and their life situations, he says.
One missing feature that would make the monthly subscription plan more compelling, in my view, is the ability to tweak the assumptions behind Jemstep’s models. For example, I’d like to be able to see the effects on my own post-retirement income if I decide I’m … Next Page »Comments (2) | Reprints | Share:
By now, you should know the truly big stories in the mobile sector: Samsung’s rise to challenge Apple, Microsoft finally acquiring Nokia, Google leaping into wearables, more moves toward carrier consolidation.
But if you want to get a jump start on some of the biggest trends shaping up in the mobile industry, you could do worse than perusing the annual survey from mobile consultant Chetan Sharma.
With a panel size of about 150 respondents, it’s not necessarily up to Nate Silveresque standards of polling. But with Sharma’s client list including most of the major players in the mobile industry, it’s a nice window into how a group of mobile executives and experts see their world.
Through those eyes, it appears that expectations for Samsung appear to be leveling off. While the South Korean company has quickly surged ahead as the clear leader in volume of mobile gadgets, it hasn’t challenged Apple in terms of profitability—no shock really, since that’s always been Apple’s approach to computing.
While Samsung was seen as the company with the “most successful mobile gadget” in 2013, industry insiders expect Apple to retake the lead this year by a clear margin.
Looking beyond the two leaders shows that expectations are high for a couple of companies from the Seattle area: Microsoft and Amazon.
Microsoft’s buyout of Nokia, set in motion years ago with the hiring of former Microsoft executive Stephen Elop and the Finnish company’s subsequent decision to tie its handset business to Windows, was seen as the second-biggest news in mobile last year.
For 2014, Microsoft’s resurgence was named as the sixth-biggest storyline in the industry, getting votes from about 15 percent of respondents. Sharma’s survey also predicted Microsoft would make one of the biggest mobile industry acquisitions in 2014, behind only Google and all network operators.
To make big waves, Microsoft will have to come from way behind—the same survey names Microsoft as just the eighth-most important player in the mobile ecosystem at the year’s outset, behind Facebook and ahead of Ericsson.
Amazon, on the other hand, is already seen as a relatively important player, ranking fifth as “most important” behind Google, Apple, Samsung, and the operators. That’s a pretty interesting development, since Amazon has no smartphone yet, instead growing its mobile business on the back of the growing Kindle tablet family.
But the mythical Amazon smartphone, long rumored to be in development, is still on the industry’s radar screen. An introduction of such a device was rated the most likely to happen this year, ahead of a Sprint/T-Mobile merger and a new kind of Microsoft smartphone.
Phones and tablets aren’t expected to have the spotlight to themselves for long. Sharma’s survey predicts that connected devices, wearables, and other new types of digital gadgets will come to the forefront in 2014. Early leaders here include Google’s Glass and Nest’s connected thermostat and smoke detectors.Comments | Reprints | Share:
When Dicerna Pharmaceuticals hauled in $60 million back in August, CEO Doug Fambrough hinted that an IPO was on the way. The Watertown, MA-based company made good on that prediction this morning.
Dicerna has filed papers with the Securities and Exchange Commission outlining plans to raise up to $69 million from public investors through an IPO. Jefferies, Leerink Swann, and Stifel, Nicolaus & Co. will underwrite the offering. Dicerna aims to trade on the NASDAQ under the symbol “DRNA.”
Dicerna, which has a proprietary approach to silencing disease-related genes through RNA interference, has already raised about $110 million from a variety of investors. Domain Associates holds the largest stake (16.8 percent), though Skyline Ventures (14.7 percent), Deerfield Management (13.4 percent), RA Capital (13.4 percent), Abingworth Management (10.3 percent), Brookside Capital (9.4 percent), SR One (8.0 percent), and Oxford Biosciences (7.3 percent) are also significant shareholders.
Like other companies in the RNAi space, Dicerna is developing drugs that are designed to hit a disease at its roots by engineering RNA molecules that shut down the production of specific disease-causing proteins. Dicerna, however, does this differently than other companies in the space. While Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), for instance, engineers small RNAi molecules, Dicerna makes them a little bit longer, which is supposed to enable them to act a step earlier in the gene-silencing process, and thus be more potent and last longer in the body. The idea here is that Dicerna could, in theory, give its drugs in lower doses, produce them for less money, and administer them with fewer shots.
To be clear, however, while Dicerna has raised a lot of money so far, it hasn’t yet proven that its approach works in humans. It’ll just begin its first clinical trial for its first RNAi drug candidate this year. That experimental drug, DCR-M1711, is designed to hit the Myc gene, which while mutated in several forms of cancer, is an undruggable target—it can’t be hit by small molecules or antibodies. Dicerna is also developing another experimental RNAi drug, called DCR-PH1, to treat a rare, inherited genetic disease called primary hyperoxaluria type 1 that often leads to kidney failure. Dicerna will begin the first trial of DCR-PH1 in 2015.
Dicerna is also looking at another familiar, yet untouchable target, the KRAS gene, as well as certain rare diseases involving genes expressed in the liver, according to the IPO prospectus.
Dicerna had about $54.7 million in cash on hand as of Sept 30. It’ll primarily use the IPO dollars to advance its two lead drug candidates into clinical trials.Comments | Reprints | Share:
The coming year will see some good news and some bad news in tech. Here are five predictions.
• IPOs: This past year witnessed an extraordinary resurgence in IPO activity for venture-backed companies. It felt much like 1999 right before the crest of the wave. With modest growth, unsustainably high valuation multiples, little excess left for Corporate America to cut, and profit margins maxed out, it makes the next 12 months feel very much like the year 2000. While it will not be such a disaster, clearly the pace of last year simply cannot be maintained. Even raging bulls need to stop and smell the roses once in a while.
• Venture Capital Fundraising: Very strong liquidity to limited partners in private equity and venture funds give them increased confidence to continue to increase—albeit modestly—allocations to this asset class. Notwithstanding every investor’s claim that they only invest looking forward, past performance (i.e. distributions) continue to fuel fundraising. Unfortunately, the rich continue to get richer as established branded firms find it relatively easy to raise new and larger funds, causing the overall roster of managers to continue to shrink.
• Crowdfunding: This form of financing continues to play an important role for startups, although admittedly, mostly around the margins. The crowdfunding phenomenon simply does not have the heft to lead Series B and C rounds. And furthermore, great entrepreneurs are looking for great business partners in their investors, as well as capital. The risk here is that there will be a spectacular scam and Senator Elizabeth Warren and others come down hard with new consumer protection laws that chill the marketplace. Disaster scenario: a foreign prince needs $10M in Bitcoins to fund his next great widget…and he actually raises the money.
• Healthcare Technology: Out of the carnage of the introduction of health insurance exchanges comes the broad and irrefutable realization that the healthcare industry simply must be fundamentally re-architected. Novel and innovative solutions lead the way to greater efficiencies and productivity. Ironically, improvements in healthcare at lower costs accelerate as more people get access to affordable care at the right time, right place. With this comes the appreciation that extraordinary near-term societal benefits outweigh any distant future benefits hoped for with continued massive investments in the next great therapeutic or medical device. In other words, collectively dollars invested in the business of healthcare will have greater overall benefits than dollars trying to find the next great molecule.
• New York Sports Grand Slam: The Mets win the World Series, the Knicks win the NBA Championship, the Giants win the Super Bowl, and the Islanders win the Stanley Cup.
[Boston-based editor’s note: This delusional last prediction should not cast doubt on Mr. Greeley’s other forecasts.]Comments (2) | Reprints | Share:
For the better part of a year, Scholar Rock has worked behind the scenes mapping out an approach to hit well-known disease targets in an unusual way. Now, the nascent Cambridge, MA-based startup is ready to discuss what it’s found.
Scholar Rock is emerging from stealth mode today to make two announcements: First, it’s licensed intellectual property from Boston Children’s Hospital related to what it calls “niche” activators—the new drug candidates it wants to develop against certain types of growth factors. Second, it’s filling out its board of directors with some well-known Boston biotech entrepreneurs: Katrine Bosley, the former CEO of Avila Therapeutics, and Michael Gilman, the former head of Stromedix. They’ll join chairman Amir Nashat of Polaris Partners, co-founder Timothy Springer, and president and CEO Nagesh Mahanthappa (the former vice president of corporate development and operations at Avila).
The two bits of news mark the first time Scholar has come up for air to tell its story since it was co-founded just over a year ago. It’s still an infant company, with about 10 employees (including a few consultants), no drug candidates in clinical trials, a Kendall Square office/lab and seed funding from Polaris and Springer to show for its efforts.
Scholar was formed in January 2012 out of the work of Springer and Leonard Zon, a fellow researcher at Boston Children’s Hospital and Harvard Medical School. Springer is perhaps best known as the founder of Cambridge-based LeukoSite, which was sold to Millennium Pharmaceuticals for $635 million in 1999, though he’s also been involved in more recent biotech startups in town, like Selecta Biosciences and Moderna Therapeutics.
The concept behind Scholar is to seek out certain specific, seemingly dormant growth factors, and create a drug that indirectly and selectively either turns them on, or keeps them switched off. By doing so, according to Mahanthappa, Scholar could create drugs with higher potency, or fewer side effects (or both), than those with a more “broad” effect on growth factors as a whole.
Growth factors are, of course, very well known in the biotech world. They’re proteins that mediate a number of normal physiological processes like cell growth and differentiation, and are also known to go haywire in the case of various diseases. As such, they’re often used or targeted for therapeutic reasons. Sometimes, for example, the growth factor is made through genetic engineering and given as the drug itself, like in the case of interferons. Other times, growth factors are themselves the biological targets that scientists seek to shut down with targeted antibodies or small molecule chemical compounds.
Mahanthappa says, however, that the vast majority of growth factors have a “wide variety” of roles and exist throughout the body. This means that broadly shutting down those growth factors—with an antibody, for instance—might hit the desired biological target, but might also interfere with other, normal physiological processes.
This is where Scholar comes in. Mahanthappa says all that growth factors aren’t just … Next Page »Comments | Reprints | Share:
If you only have time to read a few of our articles from the past year, these are the ones.
These are editor’s picks (mine). They are not based on Web traffic, but rather on a subjective weighting of their impact, significance, and representation of our mission and geographies. Xconomy is now in 9 regions around the U.S. and counting (see map).
Each piece represents a local story with global impact, or starts with a national perspective and goes from there. Each piece is something you couldn’t read about anywhere else.
So, while Twitter and Bitcoin and NSA leaks were big stories of the year, the following selections tell the fuller story of tech and life sciences innovation from the front lines.
Without further ado:
A news scoop that touched two states (California and Texas), three companies, 1,000-plus employees, and the raw nerve of a city. Bruce Bigelow investigates.
Tracking one of the biggest trends of the year: IPOs by life sciences companies. Luke Timmerman sorts out what it all means in this pair of related columns.
The headline says it all. Wade Roush’s commentary on the sad state of your cable bill (and how you might get around it).
The city that grew Amazon, Boeing, Microsoft, and Starbucks holds some lessons for entrepreneurship. Ben Romano digs these out from some of Seattle’s most successful startup folks.
Life story of a Boston biotech CEO. It’s not what you’d expect, and Ben Fidler draws you into the story with a human touch.
If you want a snapshot of Houston’s tech startup ecosystem (it’s not just Austin in Texas, really), check out this piece by Angela Shah.
A classic scoop by Curt Woodward about what Apple is working on in Boston. Hint: every big tech company is trying to develop a personalized mobile assistant using speech as an interface.
A major theme in New York City has been the emergence (and increased awareness) of female leaders in tech companies. J.P. Ruth tells the story with a celebrity twist.
Analysis piece about the inexorable pace of innovation—and how long Apple and other tech giants can stay ahead of the pack. (Wade Roush strikes again.)
We reached out to our network of Xconomists around the country, asking them about the most important innovation trend that nobody’s talking about (yet). Here are the results.
A critical look at the startup culture in Silicon Valley (and elsewhere). Hey, we had to get “brogramming” into the highlights somewhere.
Detroit is a model for American cities. Does it have a unified innovation future, or different futures based on wealth disparities? Sarah Schmid takes a deeply personal look at her hometown.
Denver and Boulder have interesting histories when it comes to business and technology innovation. Michael Davidson takes us on a tour of the entrepreneurial ecosystems of these connected but separate cities.
Honorable mention: It pains me to leave these five off the main list (and I’m sure I’m forgetting others), but we don’t have all day. Each of the following had impact in its own way:Comments | Reprints | Share:
Are they making innovators quite like James L. Vincent any more? This question, spurred by Vincent’s death on Dec. 5, has more edge these days as we worry how Americans are going to keep inventing, making, and selling new things to earn a good living in a sharply competitive world. More bluntly, do the innovators of today have the fire in the belly to build and lead a major company?
Vincent, a big guy from a small town in Pennsylvania with experience of independent command at three big companies, who believed that you have to drive your career, not just let it happen to you, turned science-focused Biogen into an integrated, global, self-standing business. Under Vincent, Biogen began building its dominance of the array of drugs for multiple sclerosis through close and direct contact with tens of thousands of patients. And Biogen, founded in 1978 and led by Vincent from 1985 to 2002, through the launch of interferon-based Avonex for multiple sclerosis and beyond, is the oldest free-standing biotech company. Today, it offers three treatments for MS, including a newly introduced oral drug and two injectables.
In developing lasting independence for Biogen, now Biogen Idec, Vincent stands almost alone in biotechnology with another hard-driving big man from large companies, George Blatz Rathmann, who died in 2012. A son of privilege who helped develop Scotch-Guard at 3M and later worked with Vincent in the diagnostics arm of Abbott Laboratories, Rathmann put in 10 years as the inaugural CEO of Amgen. Armed with a gene patent on the blood protein erythropoietin (EPO), Rathmann defied Wall Street’s nervous advice to settle a crucial suit with Genetics Institute. Victorious, Amgen achieved dominance in the market for EPO. With an array of products, Amgen is the largest free-standing biotech company.
How did Vincent’s and Rathmann’s earlier experiences in tech-built firms shape their strategies in biotech? Interestingly, they each decided to focus on a single new product—EPO for Amgen and beta-interferon for Biogen.
As is well known, most biotechnology startups have ended up within such larger enterprises as Roche and Johnson and Johnson (widely regarded as the most successful of the biotech absorbers). And the spectacle raises concerns. How can we maintain the kind of innovation that springs most naturally from a driven tribe of 150 in one large room, each with a voice but under a visionary leader, where the direction can change in a single day? Is it decreed in heaven, now that Bell Labs is dead, that big companies can only innovate by buying?
The disappearance of large, vertically integrated companies in recent decades, while the number of smaller, innovative firms has multiplied, is a striking change across the world of business. Clearly, Vincent and Rathmann anticipated the trend in pharmaceuticals. Now, the companies they built are becoming large and vertically integrated. Will they continue to innovate?
The story of Jim Vincent, an engineering graduate of Duke with an MBA from Penn’s Wharton School, who stepped determinedly from Texas Instruments to Abbott to Allied Signal before leading Biogen, shows a more complex relationship between big and small enterprises.
He knew he wouldn’t be CEO where he was. And science-driven Biogen, operating competing research groups in Geneva and Cambridge, burning through cash, pulling in licensing revenue but not yet marketing its own products, was making its big investors, Schering-Plough and Monsanto, nervous. It was clear the company needed a new direction. The directors spent 10 months in 1985 searching for a new CEO. A strong voice in the process was board member Lou Fernandez, chairman of Monsanto, which had put $20 million into Biogen in 1980, helping start the Cambridge lab. This bet was part of Monsanto’s long search to shift from fossil hydrocarbon-based chemistry, commoditized products of ancient life, to complex proteins and nucleic acids produced by organisms living today. Interviewing leaders like Rathmann, the board eventually settled on Vincent.
Jim arrived with a figurative sign on his back: “I’m boss. Follow me.” He laid it down that the company was in crisis mode. Everybody was going to count every dollar, and everybody was going to squeeze into economy class seats—even him. He knew he had to know enough science to participate meaningfully in the priority-setting decisions. He firmly believed that teams were more efficient than individuals. But, with a lot of practice, he was totally comfortable making a command decision.
He sold off the European operations, boosted revenues from intellectual property, slashed the burn rate in half, and got Biogen into the black in three years, opening the path to raising funds through new offerings of both preferred and common stock. Injectable Avonex provided multiple sclerosis patients with a serious defense against relapses.
Jim Vincent retired in 2002, having led Biogen for more than 15 years. When he died at the age of 73, his daughter Aimee spoke his epitaph: “He was very proud that Biogen maintained its independence as a company.”Comments (1) | Reprints | Share:
Last May, we announced that we were moving Datafiniti to Austin. A big reason for our move was the lack of a suitable talent pool from which to hire. There was a lot of skepticism—perhaps surprisingly so—around our reasoning. At the time, we provided what I thought was a healthy dose of data to back up our belief that the move to Austin would help us out. Now, after eight months, I can provide a full breakdown of how our move to Austin has benefitted our hiring process.
You can see (pictured, left) a conversion funnel for our hiring process. Once a candidate shows interest in Datafiniti, we have five steps to recruit and screen them.
Intro call: A 30- to 45-minute call to tell the candidate a bit about our team and what we do, as well as to learn a few basic things about the person’s experience and personality.
Fizz buzz: A small quiz that tests basic programming concepts.
Coding challenge: A one- to two-day programming challenge that lets us evaluate someone’s coding style and knack for algorithms and data structures.
Interview: An in-person, half-day interview that serves as a deep dive into someone’s technical abilities and cultural fit. We also give the candidate plenty of opportunity to learn as much as possible about Datafiniti. Interviews are two-way streets.
Hiring: If a candidate makes it this far, we’ve extended them an offer. “Failure” here means they did not accept the offer.
Between May and December, we converted 39 interested candidates into three hires. All of this was done without paying for any recruiting services, including job listings.
The main difference between Houston and Austin is a larger, more competitive recruiting environment This is intuitive. There are more developers in Austin, but also more companies trying to hire the same people as we are. Because of this, we found more people that matched the listed skill sets for our job openings, but we saw greater drop-offs through the hiring process as compared to what we experienced in Houston.
In Houston, we separated ourselves from other companies hiring developers by pitching ourselves as offering a unique (for Houston) tech startup environment. That was obviously not unique in Austin, but we found that we still offered a unique, albeit different, environment here. Simply put: we offer people the chance to work with a small team that works on big problems. We’re still around 10 people, but we process billions of data points every day. We also offer developers the opportunity to work with and be exposed to a wide variety of technologies. We use multiple programming languages, databases, and algorithms. Our developers get to touch any or all of these tools if they want. All of that is awesome and exciting to candidates.
We realized that our hiring process was taking longer than we wanted so we looked to streamline the process. Obviously, we wanted to do a sufficiently thorough job of screening people, but we felt that for certain candidates, every step wasn’t necessary. It could even be a hindrance to keeping a candidate engaged. When a candidate had a fairly active public code repository, we sometimes skipped the coding challenge. When a candidate came from a very technical background, we sometimes skipped the fizz buzz. We always made sure to test these same concepts during the in-person interview, so we never “degraded” the comprehensiveness of our screening. We just made it faster when we could.
Hiring in Austin is harder than it is in Houston. It’s also more rewarding. We learned a lot about what made us unique. We evolved as a team and everyone learned how to be better recruiters. Most importantly, we’ve constructed a team that will help us serve our customers and grow our business better than we ever have before.
By the way, if you’re interested in finding out more about what makes working with us so awesome, check out our latest job postings and contact us if you feel like you’d fit in.Comments | Reprints | Share:
There’s certainly been a lot of uncertainty in the angel and venture capital arenas over the past decade, and understandably so. Add to that, the lure of crowdfunding—a nearly $3 billion business in 2012—and it’s led some angel groups to consider if there is a role for individual investors in crowdfunding their deals.
My advice to my colleagues: There could be, but stay on the sidelines for at least another year.
Why? For starters, it’s unclear how crowdfunding will affect company valuations. The Jumpstart Our Business Startups (JOBS) Act, requires startups to publically disclose a laundry list of items if they choose to raise capital by crowdfunding. These include entity formation, background checks, shareholder listings, financial statements, share valuation and a business plan. That might seem all well and good on the surface, but angels and VCs look at many other important metrics to determine the true potential worth of a newly formed venture. These include total available market, intellectual property, management team, and other key performance indicators that, from our perspective, are at least equally important in determining the fundability of a company. The investment risk multiplies if crowdfunding portals do not address these important metrics, and this is one place where angels and angel groups can help reduce the risk.
Second, a crowdfunding platform disclosure might actually give away too much information—foiling the chances for a company to gain a “first mover” advantage in the market. Think about it for a second—what better way for an established rival to usurp a newcomer than to watch a Kickstarter campaign take off, grab enough details to mimic the product’s features, functions, and benefits—and get production rolling at a lower price point before the startup can get out of the gate. Even if the IP is protected, the litigation costs to defend it will drain whatever capital the company raised.
All of this is not to say that crowdfunding is a fad that will ultimately fade away.
There will undoubtedly be aspects of crowdfunding that will eventually make … Next Page »Comments (2) | Reprints | Share:
As 2013 draws to a close, let’s not short-change the events of the most recent quarter in our retrospective. A lot has happened in the Boston innovation scene since early October, and most of it was not commodity news.
Here are my picks for 10 of the most compelling and representative stories in Xconomy Boston from the last three months. As usual, these are a mix of people and company profiles, breaking news, CEO interviews, and analysis pieces. They span tech, biotech, healthcare, transportation, startups, big companies, and everything else under the New England sun.
In reverse chronological order (and with a few words about each):
The real stories about what companies are going through are never told in press releases. Take Radius Health, a prominent company that raised lots of money but has been going through some leadership changes at the top.
Speaking of leaders, here’s a strategy sit-down with Steve Kaufer, the co-founder of TripAdvisor, one of the biggest Internet companies in the region.
And here’s a visit to a small MIT startup trying to change the world by electrifying the humble bicycle.
Know someone who’s expecting? Here’s a tech startup with an interesting way to track pregnancy and provide relevant info along the way.
It seems every successful company has had at least one near-death experience. For Alkermes, it happened in 2002. You might learn from it.
Had to throw in a fun World Series story somewhere. The team nutritionist for the Boston Red Sox also works with a local tech startup, Segterra, that does personalized health tracking and analysis.
There’s a burgeoning business in reselling used mobile devices around the world. Gazelle is one of the leaders in the industry—and a compelling case study of a consumer-facing local tech company.
Not your typical CEO profile. Just read it—you’ll be glad you did.
One of the big biotech stories of the quarter: the rollercoaster ride of Ariad Pharmaceuticals. It all started with this.
From distinguished Harvard professor to Warp Drive Bio CEO. What gives? A real shot at creating new drugs, that’s what.Comments | Reprints | Share:
We all carry certain expectations about email from our private lives into a corporate setting. Some of those expectations are met, but in other ways business email is very different from consumer email. These differences can be confusing at best and, at worst, lead to major problems for organizations.
The Inside and the Outside
To begin with, business email is nearly always operated by or for the business, as a dedicated domain with a clearly defined “inside” and “outside,” bounded by a gateway. Inside the boundary, the business has rights and expectations of control over the information, while anything can happen outside. Consumer email may be viewed as “always outside” in this formulation. Business email that traverses the gateway, in either direction, may be subject to a variety of checks, restrictions, and other processing.
Conceptually at least, a business has complete control over any information that traverses the gateway. In practice, however, such control is often incomplete, ineffective, or absent, usually due to a lack of resources devoted to administering the gateway. Among the likely jobs of a gateway are:
• Spam filtering. This is typically done in both directions—to prevent outside spam from getting in and to prevent internal machines (perhaps hijacked by a virus) from sending out spam and sullying the business’ reputation.
• Data Loss Prevention (DLP). Whether accidental or intentional, it is not uncommon for employees to send sensitive information outside the company. If a company can define the characteristics of sensitive information—which could be as simple as the words “Do Not Redistribute”—then the gateway can enforce restrictions against sending such information outside the company.
• Large file modification. Internet email has length limitations that seem small by today’s standards and, worse, vary from site to site. Email messages that total more than ten megabytes are highly likely to fail without being delivered. As an alternative, gateways can replace large file attachments with simple links and make the files available from a web server, with or without some kind of user … Next Page »Comments | Reprints | Share:
Here in the 20-teens, the roles of for-profit businesses, non-profit organizations, government, NGO’s, foundations, investors and philanthropists are beginning to blur together. We are quickly finding ourselves in a world where it is not only possible to do good while doing business, but expected.
This is quite a change from the “Friedman Doctrine” that claimed the sole purpose of business was to earn money for shareholders. Or as the Michigan Supreme Court decreed in 1919, to “maximize stockholder value.”
While this change may not be evident for those focused on Wall Street and Washington, D.C., it is quite clear from my perch at Fledge, the “conscious company” accelerator. In terms of format, Fledge looks like any other Techstars clone, one of more than 1,000 such programs worldwide. What is unique is that we focus on early-stage companies (often yet-to-be incorporated) that aim to do something good for the world, and specifically those that embed that goodness within their product or service.
With three sessions now complete and 19 companies fledged, there are plenty of examples of this blend of good and business, including:
BURN Manufacturing designs and manufactures clean-burning cookstoves. In 2013, BURN opened its first factory, in Nairobi, Kenya, and is on track to be the largest manufacturer of cookstoves in East Africa. They are poised to save their customers not only millions of dollars by burning less charcoal, but tens of thousands of lives in reducing smoke from stoves within African homes.
Community Sourced Capital crowd-lends money for small businesses. In 2013, this company began operations, raising a total of almost $200,000 in zero-interest loans for 13 companies, sourced from over 1,500 people, filling a gap in lending that our banks no longer serve. In 2014, we expect to see over 100 loans across multiple U.S. states totaling millions of dollars.
Snohomish Soap manufactures and sells natural soaps in Seattle. In 2013, they added online and subscription sales, but more importantly, they put together a plan to expand nationwide, to be the first national brand that always manufactures locally, using a distributed workforce of stay-at-home moms and disadvantaged women.
Working with companies like these is a big departure from my 20-plus years as a software entrepreneur. We often hear about the “drive” of the entrepreneur that pushes him out of bed in the morning, after pushing him to work late into the night. That drive most often is the reward of wealth after the big “exit”.
In comparison, this realm of “conscious” companies requires no drive. It is a world filled instead with passion, which pulls you out of bed in the morning with a hope of a brighter future, and refuses to let you sleep at night with the possibilities of making the world a better place. Few of the entrepreneurs dream of any exit from their company. They are called to solve one of the problems of the world, and selling their company won’t often solve that problem.
Meanwhile, these are not the non-profit organizers of ages past. These are business people, who are seeking customers, revenues, and profits. But with a mission embedded within their businesses, they are also attracting philanthropists and foundations. It is fascinating and quite complicated. Back in the software startup world, investors come in the form of friends/family, angels, and venture capitalists., Here in the conscious world, funding comes from those sources, plus donors and grants, mission-related investments, new financial institutions such as donor-advised funds and community investment trusts, and from all of the growing forms of crowdfunding.
This is a movement not limited to Seattle, nor to the other hotbeds of social consciousness, such as San Francisco, Portland, OR, and Boulder, CO. Fledge operates within Impact Hub Seattle, one of more than 50 similar co-working/community spaces located around the world. Fledge is a Certified B Corporation, one of 875 companies from 26 countries certified in treating their employees, their community, and the environment in a positive, sustainable manner. Many of the fledglings are Washington State Social Purpose Corporations and Delaware Public Benefit Corporations, two of 21 states that now codify into law the ability for a corporation to have a social purpose beyond its fiscal purpose.
Thousands of companies are proving every day that it is possible to do good and do business, to do good and make profits, and for more and more, to do good and make investors happy. We need all three of these outcomes to keep this movement growing.Comments (1) | Reprints | Share:
Once business organizations reach a certain size, their leaders have to start thinking systematically about how to structure reporting relationships to ensure vital information reaches the top; how to identify and account for the internal and external risks that could hobble the company; and how to ensure the organization is complying with a skein of local, state, and federal laws and regulations. This area of “governance, risk, and compliance” or GRC is the one that my company, MetricStream, helps people with. And like every executive, I try to stay aware of the trends affecting my industry.
Many of the larger trends that dominated the tech news in 2013—including social media, big data, mobility, and the cloud—promise to affect risk and compliance efforts in specific ways in the coming year. Organizations have realized the business benefits of these technologies, and will now look for effective ways of managing the associated risks and regulations. In that context, here are four key technology trends that will shape risk and compliance efforts in 2014:
Social Media Strategies Will Place Greater Emphasis on Risk Monitoring
Social media is fast gaining acceptance as a formal channel of business communication. Even the SEC has ruled that social media can be used to disclose key company information in compliance with Regulation Fair Disclosure (FD).
LinkedIn, YouTube, Google+, Pinterest, Tumblr…all these social media sites have opened up exciting ways of connecting with customers. And with Facebook and Twitter going public, there might be new paid opportunities for businesses to market themselves via social networks.
However, a series of hacker attacks this year on the Twitter accounts of prestigious news sources such as The Guardian and the Associated Press revealed how social media can be an organization’s weakest point of defense, posing risks to information security, reputation, legal/ compliance, and a number of other business areas.
Responding to these risks, the Financial Industry Regulatory Authority (FINRA), the Federal Financial Institutions Examination Council (FFIEC), and the Federal Trade Commission (FTC) have begun issuing multiple social media guidelines.
Therefore, in 2014, companies are likely to broaden their social media focus beyond marketing/ communications, to include real-time risk monitoring and compliance. It will become increasingly important to use advanced social media analytics to filter through online conversations, and detect risks and non-compliance incidents.
The Bring-Your-Own-Device (BYOD) Tug-of-War Will Intensify
A 2013 CISCO survey predicted that the number of BYOD devices in U.S. workplaces will reach 108 million by 2016 . This increasing adoption of BYOD means better efficiency and cost savings for companies, and more work-life flexibility for employees.
But what if a personal device with confidential business information gets stolen or a user-installed app on the device is compromised by malware and the security and confidentiality of business data is put at risk?
In 2014, we are likely to see a greater tension between the need to protect corporate data, and the demand for BYOD flexibility; between management oversight of BYOD activities, and employees’ privacy rights.
At some point, we will have to strike a balance by defining what is acceptable and unacceptable in BYOD; implementing mature policies and best practices; and addressing questions such as: … Next Page »Comments | Reprints | Share:
I am a biotech VC, but not a techie. So I don’t follow stem cells, gene therapy, and other similar “blockbuster” technologies in the life sciences. Rather than looking at all the gosh-and-golly stuff going into the biotech pipeline, I wait to see what is coming out of the other end. So far, very little in the most innovative areas.
People are excited about biotech’s IPO window and money flowing into venture funds as reflected in, for example, Bruce Booth’s blog posts. But what he sees as a new day in biotech, I see as the same fundamentals in a new synthetic financial environment manufactured by Ben Bernanke. I applaud Bruce’s optimism. Without people like him and the enthusiasm they bring to the space, biotech would be afflicted by the same anxieties that are paralyzing pharma today.
When I assess bio-pharma through the lens of my 27 years in the business, however, I don’t see substantially better conditions than in the past. Life on the commercial side of the business is tough and expected to get tougher. No one knows how to make money developing innovative drugs. While a subset of VCs have made money for their investors, only time will tell if it is a result of luck or brains. If pharma can’t maintain, let alone grow their business, the outlook for bio-venture will not be good. Everyone needs a healthy eco-system to thrive.
The innovations that really matter are in business models that will enable us to create a profitable and therefore sustainable industry. The models that I and others like me are pursuing require some modicum of support from pharma. While interest abounds, the money required for a serious commitment remains woefully inadequate. As the industry comes under increasing pressure, the confidence needed to take chances on new approaches is diminishing. At a time when the large companies should be experimenting with new development strategies, they are reducing their commitment to discovery and early drug development. The survivors of interminable reorganizations and layoffs are fighting over shrinking budgets and are not in a position to share their meager resources with outside groups that could bring new and complementary resources to the table.
Here are my top innovations of 2013:
—The GSK-Avalon co-investment program for discovery. This is a new approach to large-company-small-company partnerships that has the potential to utilize the best features of each in drug discovery—small companies for small tasks and larger for large tasks. Will it work? Who knows? It is an ambitious undertaking to generate 10 clinical candidates in three to five years. It is an experiment worth running. In fact, pharma should be running many more like it if they hope to … Next Page »Comments (3) | Reprints | Share:
As 2013 drew to a close, we asked some of our Xconomists to ponder innovation, past and future, and to give us their predictions for the breakout innovations they expect to see in their respective fields. Here’s what they had to say:
Texas Xconomist Blair Garrou, managing director at Mercury Fund in Houston:
I’m excited about an investment theme we’ve been working on closely—the consumerization of the industrial Internet—which we believe will truly start to take shape in 2014. The traditional “consumerization of IT” theme has really only taken hold in progressive industries such as financial services and high tech. Industrial companies (energy, utilities, and manufacturing) are much slower to change, but now have begun embracing emerging trends in cloud, SaaS, mobile, and social, and the all-encompassing “Internet of things.” The difference is that these platforms must conform to meet the industrial company’s needs—where conversations occur around “assets” rather than people, and mobile app frameworks are built around infrastructure that is secure, highly scalable, and can guarantee “4 9′s” SLAs [IT service-level agreements available 99.99 percent of the time].
Ramesh Rao, director of the San Diego Division of CalIT2:
The single most sobering event of the year was the large-scale loss of trust in online privacy safeguards. I think this will have far-reaching implications for IT infrastructure. I realize that this is a dark development to highlight, but Edward Snowden’s actions will unleash a new era of technology measures needed to re-engineer trust.
Wisconsin Xconomist Laura Strong, COO of Quintessence Biosciences:
The breakthrough innovation of next year isn’t new, at all, but improved use of existing technology: social media. Pharma and biotech are on the tailing edge of using these tools to add value to their customers, whether you consider them to be patients, doctors, or payers. In oncology, patient-focused groups are leading the way in creating places and situations where patients can share and learn, not only from each other but doctors and researchers. As with all innovation, the need to invest for the long term and the risks of failure are working against adoption. I hope 2014 will be … Next Page »Comments | Reprints | Share: