Posted by: Michael Arndt on July 28, 2010
At the 2010 Lightfair trade show in Las Vegas (how fitting), 40 percent of the nearly 500 exhibitors were showing off LED devices. Matt Thomas has hopped on the bandwagon. His startup, Illumitex, entered the commercial lighting market in April, and he says he intends to have a display booth at the 2011 Lightfair. But what makes him think his little company will stand out?
Thomas gave me his pitch after flying from Illumitex's HQ in Austin, Texas. First of all, he says, the company's products are better than lots of the other new stuff out there. Competitors typically array their light-emitting diodes on disks. Illumitex places them in squares or rectangles to better illuminates all points of such common surfaces as billboards, parking lots or office interiors.
Second, the market is so new and fast growing that makers of commercial lighting fixtures haven't become married to their suppliers, giving everyone a fighting chance.
I found his third argument the most persuasive--Illumitex's investors. Since Thomas, a mechanical engineer by training, cofounded the company with chief scientist Dung Duong and Paul Winberg, its engineering vice president, Illumitex has raised $22 million from venture capitalists, led by New Enterprise Associates. Among others: DFJ Mercury and Applied Ventures, which is Applied Materials' in-house VC fund.
VCs aren't oracles, of course. But NEA has backed more than 650 startups since it began in 1978, and boasts that two-thirds have been acquired or gone public, including 3Com and Tivo. A sponsor like that suggests that Illumitex may have a chance.
Posted by: Michael Arndt on July 22, 2010
Andrew Mason, founder and CEO of social-shopping site Groupon, was part of a panel discussion at Google's Chicago office last night on innovation and startups. One of the questions he was asked was to sum up his management credo in just two words. "Cultivate ownership," Mason answered. Then he told a quick story.
When Groupon was launched in Chicago in November 2008, the seven employees were "just a bunch of rascals." They included one twentysomething guy who, though "supersmart," had so little gumption that Mason thought he'd end up working at Shoney's when he was 45. But given responsibility for a specific area, the guy flourished and now manages a staff of 65.
Mason also gave a shoutout to Eric Lefkofksy as the outsider most responsible for Groupon's success. Lefkofsky is a Chicago-based serial entrepreneur who, though his Lightbank venture capital firm, was Mason's original backer and adviser.
Groupon is en fuego. It is up to 11 million subscribers, offering group coupons for restaurants and retailers in 160 cities in 22 countries. In its 20 months, Mason said, the site has saved customers $300 million with its daily deals.
It also has its own pilot fish, according to this post on WiseBread. Say you can't use your Groupon discount or you think it's worth more than you paid, you can sell it on sites such as CoupRecoup and DealsGoRound.
The discussion was organized by the Chicago Innovation Awards--Groupon was a 2009 winner--and hosted by Google, which is one of the contest's silver sponsors this year.
Posted by: Michael Arndt on July 14, 2010
Michelin is becoming more American with its restaurant guides. The tire company just announced it will publish a guide in November for Chicago, its third U.S. city. (New York came first in 2005, with San Francisco the next year.) The dining directories, begun 110 years ago, are based on secret visits by a staff of 90 trained critics, a method that seems increasingly old-fashioned--and costly--as other ratings outfits from the Zagat Survey to Yelp rely on volunteers.
While Michelin executives were in Chicago to promote its latest edition, I caught up with Parmeet Grover, chief operating officer of Michelin's Travel & Lifestyle unit in North America.
Grover does not have a gourmand's background. He hired on with Michelin's U.S. subsidiary in Greenville, S.C., in 1996, after receiving a PhD in engineering from Georgia Tech. He moved into his current role last year. Grover says he's been a "foodie" from way back, however. "If you go back to Renaissance times," he told me, "being technical doesn't prevent one from having other interests that range quite widely,"
Here's an edited version of our conversation:
Q: With Chicago, the guide will be in three cities in the U.S. What's the plan for expanding further?
A: Globally, this will be our 26th city. And in the U.S. there are some large cities we're looking at. You could imagine they'd be in the vein of the ones we've already done.
Q: Do you see adding another city in 2012?
A: I can't comment on that right now.
Q: How has American cuisine changed in the last several years?
A: I think changes in American cuisine represent the changes in our society. If you look at the diversity of the country, it has increased over the last two decades. As a result, there is a lot of fusion cuisine.
But I think we may be onto another important trend, which is using a lot more natural ingredients, locally sourced ingredients. I see this even in Greenville, S.C., where my family is based.
Q: Michelin is doing things the way it's done for more than a century, sending in trained reviewers anonymously. Aren't you behind the times now that everybody is doing crowdsourcing?
A: In terms of the wisdom of the crowds, we respect it. But I think what we bring is another perspective that nobody else has. We are using professionals who know cuisine very, very well. What we have developed over the last 100 years is a process that's worked very well. When we say it's one star or two stars, whether it's in London or Tokyo or New York or one day somewhere in Africa, it means the same thing.
Q: So that's your advantage--you can get consistency because you know who your raters are?
A: Exactly. We are a company of engineers, so we have a process that is followed rigorously. And we never compromise.
Q: Is there any built-in bias in that training, however, that would favor a traditional French restaurant over another?
A: Not at all. I go back to something in the DNA of our company. We have five values, and I haven't seen too many companies with this fifth value, which is respect for facts. When we go in to rate a restaurant or award the stars, it's purely objective, based on what is in that plate, what has been cooked that day.
Q: How many times is each restaurant visited?
Ten times sometimes. And it's not the same person. We have many different people that go, and all of the information is put into a data base and analysis is done.
Q: Your employees have been out eating in Chicago restaurants how long to get prepared for the new guide?
A: It's been two years now. We take this very seriously.
Q: So I take it you've got employees in other cities that we don't know about doing the same sort of covert operations.
A: That is correct. And what's funny is that some of the families don't know either what they're doing. They need to maintain their anonymity. We are very serious about the confidentiality of it, which is the key to staying objective.
Even at Michelin, everybody has never met these people. My first impression was that they would all be rather heavy-set men. But that's not true. We have men, and we have women, and they seem to be normal. You wouldn't be able to guess what they really do.
Posted by: Michael Arndt on July 12, 2010
It's reality-check time for the 2010 Most Innovative Companies ranking, and for now, at least, reality is that while the list may spotlight the world's best generators of fresh products and services, these are not the best investments.
We published this year's roster three months ago. The list is based mostly on a survey of top executives around the world conducted by our long-time partner in the annual project, Boston Consulting Group. But the lineup is adjusted for financial performance including stock return. If we were presenting the ranking today, it undoubtedly would look different.
Of the 23 publicly traded companies in the Top 25, 13 underperformed the Standard & Poor's index of 500 stocks over the past three months. (And it's not that the S&P; 500 has done all that well; it's down 11 percent since mid-April.) Just three honor-roll members were actually up: Apple, BMW, and Hyundai. By sector, only automotive came out ahead.
The laggards included seven of the Top 10, with every one of them--Google, Microsoft, Amazon.com, LG Electronics, BYD, General Electric, and Sony--down 18 percent or more. The biggest loser overall was 23rd-place Nokia; its share price has tumbled 45 percent since it was named one of the Most Innovative Companies of the year.
I'll check back in three more months to see if our ranking correlates more with stock performance. Meantime, what do you think this says about the power of innovation?
Posted by: Michael Arndt on July 2, 2010
As my Bloomberg colleague Brian Womack reported yesterday, Google paid $700 million for ITA Software, a 16-year-old company that has provided the flight-booking software for Orbitz since it opened for business in 2001. The acquisition brought back memories for me. I profiled ITA's founder and CEO, Jeremy Wertheimer, in 2000 for BusinessWeek.com. The MIT PhD was brilliant back then, if still cash-strapped--he came up with the $100,000 to start his Cambridge, Mass., company by maxxing out his credit cards and borrowing from his parents. Today, he's undoubtedly still brilliant and rich, too.
Click here for the full profile.
