Last Friday at the British Consulate in Cambridge, three innovators described emerging technologies that are changing how and where healthcare is delivered–and the challenges of bringing those  technologies to market.

Jacqueline Thong, CEO and Co-Founder of Ubiqi Health, in Boston,   is developing mobile tools to track and use data on patient compliance.  Bringing Ubiqui’s  first product–which measures the impact of life style changes on  migraine headache sufferers, to market–has been slow,  Thong said, but over the course of 18 months, her company  acquired 15 thousand users,  developed a reporting system, and assessed  results.  While, originally, her company had expected reports on impact to be shared only with providers, her team found that patients were interested in knowing their results–and that when provided access,  their compliance and positive outcomes increased.

Thong  emphasized the emphasized the importance of measuring impact and showcasing findings to potential partners.  Merck and the Joslin Diabetes Center are now interested in testing the device with their patients, as are other pharma companies, payor organizations interested in cutting costs, and physicians, Thong said.

Mira Sahney, General Manger, Gynecology Business at  Smith & Nephew  Endoscopy, is building a women’s health division at the company.  She is in the process of commercializing a minimally invasive surgical tool for use in doctors offices that removes fibroids and polyps which have long been a leading cause of  hysterectomies. While, in Europe, use of the minimally-invasive procedure (hysteroscopy) in doctors’ offices  is  encouraged and financially incentivized,  introducing it to the US market has been challenging, she said.

Medicare reimburses differently depending on the location but in any case, will not pay for the procedure if performed in the doctor’s office. Getting FDA approval for a new product can take years, she said. “You need promoters.” “What is more, the American College of Gynecology  is slow and conservative;  private insurers can  see and implement the benefits but are moving slowly.  Anyone seeking to market  a paradigm-shifting device must be  prepared to work at the “micro” level, she emphasized. “commercialization is completely different in every market.”

Peter Vicars, President and CEO of VGo Communications, in Nashua,  NH,  emphasized the importance of focus in introducing a new product. His company has developed a “telepresence robot” that can moved around a space to provide  video-like audiovisual information  — by someone at a computer many miles away.  Vgo robots can be used for security, advertising and in homes and schools, Vicars said.

For example, a child with immune deficiency could not go to school, but by sending a robot in his place, he could observe the goings on and interact with students and classmates.

Robots are being  used by families to communicate with patients in nursing homes–and are also  used by health providers to monitor patients.  For example,  at a children’s hospital found that they had a 50% readmission rate–not because the doctors had done anything wrong but because parents tended to panic and bring their kids back to the hospital in case of the slightest worry.  To cut back on expensive readmissions,  one of the doctor now sends a Vgo robot home with every patient. He can then see what’s going on, thus making a virtual house call.

The possibilities seem endless, Vicars said, but it’s crucial to focus in order to determine “is there an opportunity and can you capitalize on it?”

The program was developed and moderated  by Tanya Kanigan, Founder of  Proof of Market,  which helps engineering driven companies identify and develop opportunities for their technologies and services in life science and healthcare markets.

—Anita M. Harris

CNN host Fareed Zakaria said yesterday that despite the world’s current economic and political difficulties,   he is optimistic about the future  but that it is by no means clear “who will be winners and the losers”  in what he called a “new global landscape.”

In a keynote talk at the Biotechnology Industry Organization International Convention in Boston,  Zakaria said, that the world is currently “extraordinarily  peaceful” compared with previous decade and that it is quite “unified, with a global economic system, interactive communications and technology and greater computing power than ever before.  (For example,  the cell phone has more computing power than did the Apollo spacecraft capsule in 1969. ” It could go to the moon, he said, but it could not tweet,”  he quipped. )

In the past, he said, the US has always been able to emerge from  economic difficulties  due to its tremendous capacity to innovate–and in the second half of the twentieth century, maintained a substantial economic and innovative edge over other nations.  But, he said, “we forget that at other times, other countries have  had the edge.”    He asked, “Will the US  maintain its edge?”

Zakaria outlined what he called three distinct historical  phases or causes that, he said, account for the US’  “extraordinary” lead:

(1) During World War II, the forces of destruction had a huge spillover effect.  Germany, a major US competitor, was “leveled to the ground” and England was bankrupted.

(2) During the Cold War, fears of losing out to the USSR in the 1950s  led the US government to make double the investment in US companies than it is making now;  government purchases of US computers and components accounted for the lion’s share of profits for those companies, until the cost curve began to decline. What is more, the government invested heavily in higher education, so that citizens could obtain the world’s finest education in public universities” without paying a cent”

(3) “The third pillar was Jews ” he said. “If  Hitler had not made the morally reprehensible to target Jews, the US would not have had the influx of scientists who created the bomb, transformed theoretical physics and gave the US a 30-year lead.”

What this shows, he said,  is that America’s propensity of innovate is “not due to DNA,” but rather, that there are specific historical reasons why the US took a commanding lead.

Today, he said, there is a new global landscape  in which it is possible for smaller nations– such as Denmark, where  the Global company Novo Nordisk, known for its diabetes treatments,  was founded–  to be at the leading edge in certain technologies.

What is more, Zakaria pointed out,  innovation does not necessarily correlate directly with spending for research and development.  Apple is often considered one of the most innovative companies in the world–but that is because it understood consumers and  how to create a new need,  rather than because it offers the most cutting edge technology, he said.  “Big company and big country advantages no longer hold, going forward.”

On a panel following the talk, Kiran Mazumdar-Shaw, founder and chair  of the Indian biotechnology company Biocon, said that the current process of biotechnology development is unsustainable and most products are too expensive to benefit most of those who need them.  “Countries in Asia must reinvent the process of drug innovation,” she said.

Greg Lucier, CEO of Life Technologies, which supplies systems, biological reagents and services to enable scientific research, said that  new genomics tools will be the stimulus to streamline innovation, cut costs,  and change the future of  human health.

Derek Hanekom,  South Africa’s Deputy Minister of Science and Technology emphasized the importance of  government’s role in providing access to care and sanitation. Governments can promote innovation by recognizing and supporting it,  reducing unnecessary regulations yet adding regulations to promote competition, and supporting  education to develop a skilled workforce.

Yucel Altunbasak, president of Tubitak, the Scientific and Technological Research Council of Turkey, listed financing, talented people, regulatory framework, and a governmental support mechanism as keys to helping emerging markets do “what the US did in the 1950’s.”

Chicago-based  Healthbox is now accepting applications for a new,  $50,000 three-month  health tech business accelerator program  to start August 13,  in Cambridge.

In the program, up to ten  selected New England-based companies will receive: $50,000 in seed capital;  collaborative workspace;  access to a mentor network of industry experts  and strategic guidance, according to Dan Phillips, a director of  Sandbox Industries, Healthbox’ parent company, who attended Venture Cafe in the Cambridge Innovation Center last week.  The  program will conclude with a high-profile conference in November at which each participant will pitch to an audience of investors and healthcare leaders from across the country.

Healthbox  is one of the first business accelerator programs in the healthcare industry to support a platform for  innovation among seed-stage companies, according to the Sandbox Website.

“Massachusetts’ world-renowned academic institutions, cutting-edge provider systems and strong investor community make it an ideal location for a healthcare accelerator to stimulate the ecosystem and support new ideas,” said Healthbox founder Nina Sharif, in a press release.  “We are looking forward to working with New England’s most promising healthcare entrepreneurs to help them gain traction in the industry and develop sustainable businesses.”

Massachusetts Blue Cross Blue Shield Venture Funds will be among those providing financial support for the Cambridge program, according to Ryan Boxill of the BCBSMA Finance Development Program.

Earlier this year, Healthbox hosted its first program in Chicago.  According to a company press release, ten healthcare technology startups were selected from hundreds of applicants and, within three months,  the teams were able to evolve their business models and establish new partnerships and pilots. The program was supported by strategic partners including  Boston-based HLM Venture Partners; Ascension Health;  BlueCross BlueShield Venture Partners; California HealthCare Foundation; Merge Healthcare;  Merrick Ventures; Sandbox Industries and Walgreens.

David Nichols of CareWire, a Minnesota-based company that participated in the Healthbox Chicago program said: “This program has helped us really focus in on our core value, rapidly test assumptions and launch pilots with new customers.”

Mark Hall, the CEO of New Jersey-based United Preference, another Healthbox Chicago participant, added “Things that take 6 months or 12 months in other environments, we’ve been able to achieve in 2 to 4 weeks here.”

According to its Website, Sandbox Industries creates, invests  in and explores new businesses that it believes could change markets. Through a new model of business development that “helps rather than harass entrepreneurs,”  it aims  to “grow successful companies through collaboration and knowledge sharing…redefining the way great ideas are generated and transformed into successful companies.”

Applications are currently being accepted on the Healthbox website at www.healthboxaccelerator.com/apply. For information and announcements about the program, visit www.healthboxaccelerator.com and follow the Twitter feed – @health_box

—Anita M. Harris

Anita Harris is a writer and journalist based at the Cambridge Innovation Center in Kendall Square, Cambridge.

Newspapers have long kept tabs on the changing world–but have themselves been slow to modernize. To  flourish these days,
when anyone with a computer can be a publisher,  news organizations must develop a “culture of innovation. ”

So said Richard Gingras, the head of News Products at Google,  on May 11, 2012 in a talk at Harvard’s Nieman Foundation.

Gingras, a founder of Salon.com and long-term media technologist , said “I push people to rethink every aspect of what they’re doing”–including their mission, ethical guidelines, how they interact with their audiences, transparency regarding sources,  and even whether reporters divulge their personal political positions. In light of today’s powerful new technologies and human interactions,  “innovation  must be part of an organization’s DNA,”  at the core of newspapers’ culture, and  incorporated into “the role of every member of the team.”

Gingras pointed out that this by no means the first “disruption” time for the media.  With the advent of television,  for example, newspaper advertising declined and in some cities, the number of newspapers went from five to one or two.   This was not great for the newspapers that went out of business and  led to monopolitistic control by the  survivors. But it also led to    “40  golden years of profitability” for those survivors.

Today, the Internet has “disaggregated” the advertising economy., he said.  No longer do consumers look to their local newspapers for car ads, for example: rather, they search the Internet for information and deals.  “In the past, you could have an ad in the New York Times for Tiffany’s near an article on starvation in Darfur… or articles for garden centers in  the Lifestyles section,” Gingras said.   But on the Internet, such “vertical models” for advertising  are not effective.  ” Might news organizations’ Web sites do better as “a stable of focused brands with independent business models?” he asked.

Gingras also suggested that news organizations:

• Optimize news Web sites for multiple entry points,  because individual story pages are, today, more valuable than first or home pages. These individual pages should be updated so that urls remain constant–thus optimizing search engine results.

• Include more “computational journalism”–in which reporters post interactive information tables that would allow readers to answer their own, individualized questions.  For example, in a story on the state of education, provide tables showing student progress in school districts across the city–so that parents could assess statistics on their own children’s schools

•  Leverage the assistance of  “the trusted crowd”  (interact with readers and keep them involved)

•  Make reporters responsible for updating their own stories–with “constant” urls  to encourage multiple visits to their pages

Gingras also said that  in a culture of bulletpoints, updates and posts,  there  is low return on investment for long articles–and advised keeping articles  under 500 words.

So  I’ll quit here–at 494.

A video of the complete talk  is posted at: http://www.nieman.harvard.edu/newsitem.aspx?id=100198

–Anita M. Harris

Anita Harris, a former national journalist and Nieman Fellow,  is president of the Harris Communications Group, a marketing and communications firm located in Cambridge, MA.

For entrepreneurs seeking venture capital funding, there’s good news—and there’s bad news. The good news is that  it’s easier now than at any time in the last ten years to get relatively small amounts of seed money. The bad news is that it’s harder to obtain “A Round” or additional series funding after that.

That was the consensus of  three Boston area venture capitalists who spoke at the Cambridge Innovation Center on  Wednesday, May 2.  Moderator Ben Hron of  law firm McCarter -English, which sponsored the event, asked the VCs  how the 2008 economic downturn  has impacted the VC industry;  where things stand now,  and what they foresee for the future.

Impact of the recession
A changing industry
Jo Tango, founder and partner of Kepha Partners, which invests in early stage companies, said that for many VC firms, this is a period of innovation. “We call it VC 2.0,”  he quipped to the audience of  entrepreneurs.  The VC industry, which started in about 1980, used to be dominated by approximately 20 major firms; today, there are more smaller, more specialized VC firms, he said.

David Beisel, co-founder and partner of  NextView Ventures, a dedicated seed-stage venture capital firm focused on Internet startups, said that the downturn has “facilitated a  maturation process,” which he likened to what happened in the beer industry in the 1990s.

That is, “You had to be either one of the biggest, like Anheuser-Busch—or a microbrewery.” Mid-size companies like Genesee fell by the wayside.

Likewise,  today,  he said, “VC firms are no longer trying to be all things to all entrepreneurs; they’re taking a dedicated approach.  Recently, four or five firms raised more than $1B but mid-sized firms are struggling.”

CA Webb, Executive Director of the New England Venture Capital Association, said that considering this a time of “introspection and innovation” is “optimistic…The reality is that the industry is taking a hard look at itself. Some say that the ‘sky is falling,’ because there’s less money being invested; this means that some firms will shut down. Those that succeed will need to articulate clearly just what they are willing to offer and to whom.”

Tango pointed out that “Innovation [in the VC industry] creates a challenge for entrepreneurs because VC firms are “all over the map,” and “it’s difficult to know which one is right for [a particular startup]. It’s easier now to get seed money–but terms are often more difficult to distinguish.”

Current trends
In asking the panelists for their views on the current venture funding situation, Hron shared Q1 2012 statistics showing  a large number of deals but a drop in total funding compared with previous quarters– in indicating fewer “megadeals.”  “Should entrepreneurs should be optimistic because of the number of deals or pessimistic about the size of the deals?” he asked.

Fewer large deals
Tango responded that one reason for the decline in large deals has to do with the number of deals VCs have previously closed.  In the current economic climate, he explained, it’s difficult raise a stream of money. In a recent study of five VC Web sites, his firm found that many VCs are already sitting on the boards of 10-17 companies in which they have invested. “If you’re fundraising…if you’re already on 15 boards, you need to spend your time fund raising,” not sitting on additional boards.

Smaller investments
Beisel described what he called a longer term trend:  in some sectors, especially digital media, companies don’t need to raise as much money for initial funding as in other sectors–so at earlier stages, the venture community is reacting by not writing $5M checks but rather $1M or .5 M.

In Webb’s view, “seeding is now like the old Series A funding: there is a lot of seed money to go around but Series A is now looking like the old series C “(IE–difficult to come by).

Follow-on funding can be problematic.
Tango agreed –describing a firm that backed 20 companies with seed money but told him it will provide only 2 % of those with Series A funding.  He added that the situation is even more complicated because even at the “seed stage,”different VCs require different terms.

In fact, he recommended, “Ninety per cent of startups should be bootstrapped (funded by self, friends and family) because other investors expect that they will get their money out within a few years. “With VC funding, you’re becoming a fiduciary…taking on ‘credit card debt’ that you will need to pay back.”

In Beisel’s view, before taking any money from VCs, an entrepreneur needs to know how outsiders view the firm, the reputation of the VC firm, which partner will be best for the company, and whether the firm usually adds to series funding or “will you be one of the 98% that get dropped?”

Health care vs. other  investment
Citing a decline in financing for health care ventures in Massachusetts compared with increased financing for Internet and mobile technology, Hron asked if investors are seeking short-term gains as instead of  taking the long view required for biotechnology and pharma payback.

Webb responded that one reason for the slowdown in health care company funding is that the US Food and Drug Administration is taking longer to approve products so the horizons for investors are longer. As a result, investors are shifting toward healthcare technology, “big data” and products that will bring a quicker return.

In Beisel’s view, “Over the last ten years the returns for health care investment have not been that great; health care is now even more challenging. But VCs won’t shift to other spaces; the money just won’t get raised.”

Long -term trends
According to Hron, the data suggest a rise in VC investing in Washington State, Texas, and Illinois. “Are we seeing the rise of a national VC community or is this a blip?” he asked. “And will VC investors look at companies nationwide?”

Tango and Beisel agreed that large investors are looking at companies nationally and internationally–especially in the Internet space.

They also agreed that it’s unlikely that VCs will spring up in Kansas or in “third-tier American cities,” as Beisel; put it.  In Tango’s view, “they will still be centered in Boston, NY and California.”  Beisel pointed out that that VC firms are on the rise in nations like Argentina and Eastern Europe.  According to Webb, “Capital clusters around academic institutions: You won’t see much density elsewhere.”

Crowd sourcing
Regarding the  recent passage of legislation allowing corporate fundraising through crowd sourcing, panelists expressed concerns about possibilities for fraud and entry of organized crime; and also  that unsophisticated investors might not know that seasoned professionals expect to lose money on most  investments—in hopes that a few will have big payoffs.

Asked by Hron if VCs will look askance at companies raising initial funding through crowd sourcing, Beisel said  that it’s fine to get seed money wherever you can but a “real company” will need institutional investors in order to grow large.

In Tango’s view, “Your source of funding depends on what you want to accomplish: Do you just want to get money…or are you looking for series of VC rounds, advice and support?”

PANELIST BIOs

David Beisel – David is Co-Founder and Partner of NextView Ventures, a dedicated seed-stage venture capital firm focused on investments in internet startups.  Previously he was an investor at both Venrock and Masthead Venture Partners, where he served on the boards of BlogHer and Gazelle.  Prior to joining Masthead, he co-founded Sombasa Media, an e-mail marketing company which was successfully acquired by About.com and subsequently became a division of Primedia (NYSE: PRM), where he served as Vice President of Marketing.  He is also the founder of the Web Innovators Group, a quarterly entrepreneur-focused event which attracts nearly a thousand attendees.  David blogs atwww.GenuineVC.com.

Jo Tango – Jo is Founder and Partner of Kepha Partners, an early-stage venture capital firm.   Previously, Jo spent was a General Partner at Highland Capital Partners, where he worked for nearly nine year, and before that he spent five years with Bain & Company.  Jo has invested in the e-commerce, search engine, Internet ad network, wireless, supply chain software, storage, database, security, on-line payments and data center virtualization spaces.  He has been a founding or first institutional investor in Azuki Systems, Bit9, ExaGrid, StreamBase Systems, Vertica Systems (acquired by Hewlett-Packard), Virtual Iron (acquired by Oracle) and VoltDB, getting involved nearly always at the company inception phase. Other investments include Ask Jeeves (Nasdaq: ASKJ), Digital Market (acquired by Agile Software), and NextCard (Nasdaq: NXCD).

C.A. Webb – C.A. became the Executive Director of the New England Venture Capital Association in January 2012.  Members of the NEVCA include more than 700 venture capital professionals from over 100 firms that collectively manage more than $50 billion in capital.  C.A. has spent her career in entrepreneurial roles with mission driven, early stage and high growth organizations. Her work has focused on breakthrough business models in a diverse array of industries including retail and packaged goods (Whole Foods Market), consumer internet technology (Care.com), sustainability (Preserve Products), historic preservation (Trinity Boston Foundation), public education (Boston Collegiate Charter School), and publishing (Fast Company magazine