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Innovation Economy

Some Boston start-ups find greener grass elsewhere

By Scott Kirsner
May 31, 2010

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Highlights from Scott Kirsner’s Innovation Economy blog.

I posted last week about two start-ups born in Boston that have since moved, one to California, the other to Asia.

This month, TaskRabbit founder Leah Busque traded Cambridge for San Francisco, and took the company with her.

TaskRabbit, founded in 2008 after Busque left her job at IBM Cambridge, has created a network of runners in Boston who can take care of small jobs for a fee, like picking up dry cleaning, making a trip to Ikea, or installing a window air conditioner. (I first wrote about the company last summer, when it was known as RunMyErrand.)

Busque did a great job finding some early supporters and angel investors in Boston.

Zipcar’s chief executive, Scott Griffith, became an informal adviser and offered her free office space in Cambridge, for instance.

Last summer, TaskRabbit was chosen as one of 20 companies to participate in the inaugural fbFund Rev, a 10-week development program in Palo Alto for start-ups building products that plug into Facebook.

The fbFund program is overseen by Facebook, Founders Fund, and Accel Capital, which made a $25,000 investment in the selected companies.

Busque commuted between Boston and Palo Alto during the fbFund program. Afterward, in fall 2009, TaskRabbit raised $1 million from two Bay Area venture firms, Baseline Ventures and Maples Investments.

Busque is diplomatic about the decision to head west with her husband. She says the main reason is that San Francisco will be the second market in which TaskRabbit is launched, and she wants “to get out there and make sure that everything happens perfectly.’’

Two full-time employees will remain in Boston.

But asked whether she will also move to the third city TaskRabbit is launched in, and the fourth, Busque says that isn’t the plan. She describes the move to San Francisco as permanent, “at least for the foreseeable future.’’

When she participated in the fbFund program, productivity guru Tim Ferriss became an adviser to the company, and “he was the one who introduced us to some key investors,’’ Busque says.

She did make a pitch to investors in Boston as well as in the Bay area, Busque says, but no one here stepped up to invest. “In Boston, maybe we were too early for folks,’’ she says.

As of next week, the company will be based at the San Francisco outpost of Dogpatch Labs (a group workspace with free rent, operated by Waltham-based Polaris Venture Partners). Busque says she plans to launch a private beta of the errand-running service in San Francisco in June.

The other Boston company that found a home elsewhere is Intuitive Automata Inc.

The last time I saw founder Cory Kidd, he was at the MIT Museum in Cambridge, talking about the “social robot’’ he’d developed as a project at the school’s Media Lab; it was designed to help dieters meet weight-loss goals.

A robot with expressive eyes and a face, Kidd had discovered, was pretty effective as a coach.

Just over two years later, his nine-person company is headquartered in Hong Kong and plans to start rolling out its first product, in partnership with Hartford-based Aetna, in late 2010 or early 2011 — a pilot program that will be supported by Johnson & Johnson, he said.

“What health care insurers will tell you is that there’s a difference in the amount they spend on people of normal weight each year, which is about $2,400, and obese people, which is about $3,600,’’ Kidd said. “But they can’t charge different premiums.’’

It’s in an insurer’s interest, he suggests, to pay for or subsidize a device like the one he has built, to encourage customers to lose weight. (Kidd has not set a retail price for the bot.) He refers to the company’s technology as “socially interactive robots’’ that support behavioral change, and believes they could be used to help diabetes patients better manage blood-sugar levels.

How did Kidd’s company, with its research roots at MIT and Boston University Medical Center, wind up in Hong Kong?

The short answer is government incentives.

Kidd says he looked at plunking the company in various US cities, as well as in Singapore or Shanghai. But Hong Kong offered a roughly $250,000 interest-free, unsecured loan that could be paid back as a percentage of the company’s revenue, as well as free rent for 18 months and below-market rent for another 18 months. Intuitive Automata has also had several student employees whose salaries are predominantly paid by the government.

“Most of the angels and venture capitalists you talk to about social robots look at you like you’re totally crazy,’’ Kidd said. Because he had raised only a small amount of funding from individual investors (mainly from MIT alums around the world), “I needed to go where I could run the company very cost-effectively.’’

Being in Hong Kong also puts him closer to the contract manufacturing companies that will build the bots.

Kidd expects to start taking preorders this year; he also says he’s in the midst of raising a first round of venture capital.

For the full Innovation Economy blog, updated daily, visit www.boston.com/innovation.