Part Two: Best of Boston Startups

Boston, Massachusetts, home to Harvard University, Sam Adams and the Red Sox,  has maintained a reputation of excellence and entrepreneurial American spirit since its first epic Tea Party in 1773.

Boston is defined by its universities and its vibrant new marketing space. While New York may lead in PR, buzz and consumer adoption, there is no doubt that Boston breeds great technical talent coming out of its 74 local universities including Harvard University, Boston University, Boston College, Tufts University and MIT. All in all, Boston is home to over 350,000 young, tech savvy students.

“The Boston scene is intellectually powerful with an entrepreneurial spirit. The community itself is incredibly collaborative.” -Chris Mahl of SCVNGR

A little company named Facebook started in Boston, as did ZipCar, TripAdvisor and Kayak; meanwhile Cisco, Microsoft and Google all have offices there. With all its talent it wasn’t hard to round up a list of exciting Boston startups that you need to know about, it just took quite a bit of digging.

Last Friday, I gave you the first serving of what Boston’s startup community has to offer. Today, I present you with Best of Boston, Part Two.

1. SCVNGR

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While the LBS space is arguably the most competitive right now, SCVNGR is poised to become the competitive gamer’s favorite location based app. SCVNGR officially launched a couple of months before Foursquare and is one of the few apps that adopted Facebook’s Single Sign-On feature that was announced last November.

The business has two layers- a virtual game for consumers to play everyday in the real world and a B2B platform serving brands such as National Geographic, Buffalo Wild Wings and Coca-Cola as a promotional games service.

Founder Seth Priebatsch started SCVNGR while still a freshman at Princeton University. The “Proud Princeton drop-out” took his company to Boston and received funding from Highland capital in December 2008. By the end of 2009, he had 350 clients with a million dollars in revenue. Today, they have 1,350 clients and just raised another $15 million in funding putting their total money raised at $20 million.

I spoke with native San Franciscan Chris Mahl, SCVNGR’s “Chief Alchemist,” who says, “We are introducing the theme of play into everyday life.” SCVNGR launched their consumer app at Google IO in May 2010. In October, SCVNGR integrated with Google Places, and they are the only company that does this outside of Google (Google Ventures happens to be one of their investors). Download SCVNGR’s app for either iPhone or Android.

2. WHERE

WHERE is a location based mobile startup with a solid name and URL. Like SCVNGR, it also has two layers. First, it is a consumer app and second, it serves geographically targeted ads to consumers looking for merchants on their smartphones. Its advertising therefore feels less intrusive and more helpful.

“We see the future of local advertising as a strong component of our organization. We can effectively improve the match rate of an ad to a consumer and as you pull those two things together, what we really are is a media company.”

-Dan Gilmartin, VP of Marketing, WHERE

WHERE launched its consumer application in March 2009. It’s current consumer base has been growing at 550,000 users a month to reach its current total of 4 million users. Recognizing the issue of ad relevancy, they signed up a number of publishers and started to distribute their ad network through third party publishers in March 2010. Today they have over 250 publishers including Pandora, Accuweather, Flixster and NBC. Since launching their ad network, they have grown from 30 to 80 employees and their platform handles over 2 billion ad requests and has reached 50 million uniques.

Apps are available on all 5 platforms- iPhone, Android, Blackberry, Windows and Palm. Download the apps here.

3. Vitality

“I always say our product is the next way of the web,” says David Rose, the CEO and Founder of Vitality, a company that produces prescription bottle caps that “think.” In a time when all the buzz is about robots for your home to aid the elderly, Rose, who also teaches at MIT’s Media Lab, decided to simply reinvent medication packaging.

Vitality’s GlowCaps are Internet connected pill bottles that light up and play a tune when it’s time for the user to take their medication. If the cap hasn’t been opened up by a certain time, the user will get a phone call reminder.  The GlowCap can text a family member if you forget to take the medication, and it can also send its data over the Internet to create a monthly report of how closely you adhered to your medication regimen. Users can also push a button on the cap to automatically refill their prescription.  The cap’s wireless chip talks to a night light networked hub in the home which then connects to nearby health centers over AT&T’s network.

Let’s not change the packaging or the work flow for the pharmacy. Let’s just embed the technology and try to give it away to as many people as possible funded by big pharma or insurance companies. – David Rose

Vitality plans to reach 200,000 customers in 2011. The entire setup can be leased for $15 per month from Amazon, plus the cost of the caps, which are $10 each and have a battery life of 6-9 months. According to a study performed by the Harvard Center of Connected Health, the GlowCaps have produced a 26% increase in medication adherence. Rose is therefore working with insurance companies to encourage them to cover the caps, positing that connected health devices are proven to change people’s behavior.

Just last Wednesday, the richest man in Los Angeles, Patrick Soon-Shiong bought Vitality. While terms of the sale were not disclosed, Rose and Vitality president Josh Wachman say they’ll stay on, and that they’re focused on developing new products, like a colorful and cute wireless pedometer for kids.

4.  Privy

The daily deals space is getting stale. Enter Privy, a disruptive, simple and pretty way for businesses to create, launch and redeem deals and gift certificates right from their own site. The easy to use platform was created by Bostonian Ben Jabbawy after receiving complaints from merchants about existing players in the daily deals space. For example, merchants were peeved that sites like Groupon wouldn’t give them access to the subscription lists of the new customers the deals brought in.

After a one time installation, the merchant has their own dashboard within Privy and never has to mess with the code again. Once it’s up and running, merchants can create deals and change them. Privy is saving merchants $20,000-30,000 in what it would cost to hire web developers, manage credit cards on their websites and is giving the consumer the ability to redeem the deals in-store using their mobile, plus added analytics.

“Privy recognizes a difference in intention for the consumer. With bigger daily deals sites, you wake up and see a Groupon email of Chinese restaurants that they’ve never heard of, but in Privy’s scenario, the consumers buying the deals have heard about the restaurant or bar on their own, either from word of mouth or sites like Yelp, so they have a genuine interest in the business. Deals sold on Privy are therefore bringing in higher quality customers,” says Ben Jabbawy.

Privy empowers merchants in 3 ways: driving more traffic to their site, converting more traffic using pre-paid deals and gift certs, and remarketing to newly acquired customers. In the future, they will be charging 10% of each transaction- so it’s a pay for performance model, which is key. For their first 100 merchants, it’s only a 5% transaction fee. Privy incorporated at the end of December and launched with its first customer Think Tank, a funky bar and restaurant in Cambridge, Mass. So far, 20 more merchants have signed up.

5. Gazelle

Gazelle is a fast-growing consumer service that lets users trade in their used electronics goods. Gazelle sends out a box to the consumer along with an Amazon gift card. Named one of Inc’s fastest growing companies, Gazelle closed a $12 million round of Series C funding in August, 2010.

“Gazelle’s exceptional growth proves that consumers are changing the way they think about consumption and are constantly looking for ways to make smarter, more environmentally responsible purchasing choices,” says Israel Ganot, Chief Executive Officer, Gazelle.

Since launching in 2007, more than 150,000 consumers have worked with Gazelle to reCommerce more than 300,000 products and responsibly recycle thousands
more. Visit the site to find the value of your electronic device, then send the item
to Gazelle; shipping is free and shipping materials are provided for smaller items. The item is hand inspected by the gadget lab team, who is even trained to remove data using Department of Defense software. Gazelle determines an offer for each device based on its condition and current market value; the average consumer that reCommerces their electronic device with Gazelle receives $100 for their item. $aving the planet is $weet.

6. Rue La La

While much farther along than other startups, Rue La La, “the Gilt Group of Boston” is one of Boston’s shopping startup gems. Like Gilt, Rue La La buys overstocked items from luxury brands and sells them at a discount to it’s private community members. New members must be invited by a current member, and they currently have 2.6 million members.

We are people who love style, whether it’s a well-delivered retort, a perfectly frothed cappuccino, or the star offering from a favorite runway designer. Above all, we are people who love discovery. It’s the unexpected that pleases us the most. Something new, different, whimsical. A fresh twist on a classic. A find that surpasses expectations and just begs to be shared. Oh, and we are people who think we can have it all at fabulous prices.- Rue La La

The company sells clothing and accessories for both women and men, beauty products, travel experiences and wine and gourmet options. Rue La La has over 100,000 Facebook fans and over 13,000 Twitter followers. Follow Rue La La on Twitter for updates on NYC’s upcoming Fashion Week.

7. Svpply

Svpply (pronounced “supply”) launched at the end of November and has fast become my favorite window shopping website. To get started on Svpply, search for apparel, accessories, shoes, tech, media, home stuff and sort by gender and price. All of the content is uploaded by users with particularly good taste through Svpply’s easy to use bookmarklet. In addition, Svpply provides sections for Editor’s pick, Gift guides and Popular this week for your browsing pleasure.

Like an item a lot? You can email it to a friend or share it on Twitter and Facebook. Click buy and the site takes you to the retailer’s website. It is minimal shopping at its finest.

“Our background is more engrossed in the aesthetic. One of our goals is to have a shopping site guys won’t be afraid of. On the front page, you dont even know you are being sold to,” says Ben Pieratt, Svpply’s CEO, who has twice been named one of our nation’s Top 20 Designers Under 30.

Svpply raised $500,000 from SparkCapital in a series A round from the Founder’s Collective and a handful of great angels including Joshua Kushner, Ron Conway/SV Angels, Adam Pritzker, Jason Hirschhorn and Foursquare founder Dennis Crowley.

To check out my collection, visit cbm’s Svpply.

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The Best of Boston startup list grew into something more dynamic than I could ever have imagined. The tight knit community boasts some of the best and brightest intellect our country has to offer. I looked for innovative small companies, making moves in their specific niche. I purposefully left of bio-tech and clean energy companies; we will feature a complete list in this category in spring 2011.

Part One: Best of Boston Startups