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High-Tech Home Run Leaves Home Field
by Paul Bass | Jan 3, 2012 12:06 pm
(17) Comments | Commenting has been closed | E-mail the Author
Posted to: Business/Labor/ Economic Development, Higher Ed
Daniel Abadi’s new Science Park company snagged $9.5 million to start hiring people fast—in Cambridge.
Abadi (pictured) and a team of fellow Yale researchers developed a hot new software program called “Hadapt.” It has the potential to revolutionize the way companies store and analyze huge amounts of data.
Investors thought enough of the program’s potential to offer millions of dollars in start-up capital to launch Abadi’s company, Hadapt Inc., to further develop and sell it. A team of investors recently gave the company $9.5 million.
Now the company is scrambling to hire 30 software developers and marketing people. At its new office in Cambridge’s Kendall Square. Only a handful of employees will remain in New Haven.
All the potential investors made it clear that they would participate only if the company located in either Cambridge or Palo Alto.
“That question came up very early,” Abadi, a Yale assistant professor of computer science, said in an interview in his spare Prospect Street academic office. “The investors said they had no interest in investing if we stayed in New Haven.”
As New Haven pursues an “eds and meds” job-creation strategy, the story of Hadapt’s rise follows the script for policymakers hoping to grow new companies by commercializing university research. But it reflects how in some cases the city may not yet have reached the point of being able to translate that script into actual new jobs.
The hopes begin with the brains and insights of entrepreneurial academics like 31-year-old Abadi.
Jumping Through Hadoops
Abadi, who now lives downtown, came to Yale four years ago. He earned his PhD at MIT studying “scalable data management.” That means figuring out how organizations using thousands of computers at once can store, analyze, and use huge amounts of data.
Abadi offered a hypothetical example of what kinds of questions that field explores: How does Walmart, say, test the wisdom of moving basketballs from a top shelf to a lower one, and moving footballs up to eye level? It feeds copious records of sales transactions from different seasons, some from regular stores, some from test sites with lowered basketballs, into banks of computers, which then seek to crunch the numbers to see if the tests produced better sales.
It’s a lot more complicated than it sounds.
Abadi planned to continue that work as a faculty member at Yale. With fellow professor Avi Silberschatz, four PhD students, and a posse of undergraduates, he started a lab known as “DR@Y,” for “Database Research at Yale.”
Abadi wanted to make an impact on his field. So rather than invent software completely from scratch, he decided to work with a popular open-source program called Hadoop. A developer named Doug Cutting started creating Hadoop based on a 2004 paper Google published about its own approach for getting thousands of machines to work in parallel to allocate and analyze data. Google and Walmart keep their codes secret. Cutting’s made his public—or “open source”—so techies around the world helped him continually develop it. Hadoop took off after Yahoo hired Cutting and a team of developers to improve it—and keep it public. Today “even old stodgy firms like Sears,” Bank of America, and GE use Hadoop, Abadi said.
In his DR@Y lab, Abadi’s team worked on a new software program based on Hadoop that could enable companies to process and analyze all that data much faster. Unlike Hadoop, which uses raw “unstructured” data, the new program would draw from data already arranged in tables. Larger companies like Verizon have such tables.
Abadi and company called the program “Hadapt.” (As in: adapt Hadoop.) They tested it. The results: It worked some 50 times faster than regular Hadoop.
So they now had a proprietary program to bring to market. If they could find the money.
In keeping with Yale’s mission of putting tech research to commercialize use, Abadi brings an entrepreneurial streak to his research.
“I want my research to be used by eBay, Fidelity,” he said. “It’s way more fun to have your impact while you’re still alive. Especially when you’re up for tenure.”
The opportunity came almost by accident. A venture capitalist had come across Abadi’s research results. He alerted Yale’s Office of Cooperative Research (OCR) that it may have a golden prospect on its hands. A School of Management student named Justin Borgman was working in that office at the time. He saw the notice. He contacted Abadi, asked for meeting along with people from OCR. Let’s start a company, Borgman said.
So in the fall of 2010 they started Hadapt. They set up shop in Science Park. Borgman serves as CEO. Abadi and some of the lab members have equity stakes and work part of the time for the company, part of the time at DR@Y.
It turned out “dozens” of potential investors made inquiries about financing Hadapt’s start-up. A team led by NorWest Venture Partners and Bessemer Venture Partners prevailed, ponying up $9.5 million to get the company off the ground.
That was in October. Now Hadapt is hustling to fill 30 positions. The company has some beta clients already and hopes to get version 1.0 of its software program to market some time in January. It’s keeping a handful of people in a room at Science Park, but otherwise hiring and working in Cambridge.
“Here’s the basic issue,” Abadi said. “Database software is a very, very specialized industry. There have only been one or two dozen database companies that have ever done anything successful.” Maybe 200 people at most worldwide are qualified for Hadapt’s most specialized developer positions, he said. And they tend to be located in Silicon Valley, near Stanford; in Seattle, near Microsoft and the University of Washington; or near MIT in Cambridge. Hence investors’ insistence on leaving New Haven.
On The Map
Is that bad news for New Haven?
Disappointing, perhaps, but understandable. With a definite upside.
So says Anne Haynes, who runs New Haven’s Economic Development Corporation (EDC).
“We should be proud of Hadapt’s success,” she said. “People will know it started here. As much as it’s sad to lose a company like that, they’re going to have great success and always be known as a Yale and New Haven-minted company.”
So while New Haven can’t compete to provide workers for this one highly specialized field right now, it will get more of a reputation as the birthplace of hot tech companies, she argued. That can help attract new venture capital for other tech businesses, gradually growing the sector.
EDC, meanwhile has been organizing “orientation activities” for venture capital firms, leading tours and mailing information about Yale’s and the city’s growing tech sector.
Abadi said he believes New Haven can become “a center for technology innovation,” including database management. “There are a lot of smart people around New Haven.”
He, for one, hopes to stay around New Haven. In addition to hitting a venture capital home run, he just had another life-changing event: He’s engaged to be married.
Post a Comment
Comments
posted by: anon on January 3, 2012 12:21pm
Many if not most of the tech companies in the state are decamping to, or on the verge of decamping to, Cambridge/Boston. Look at what is happening with Pfizer, Schlumberger, and others. This has been known for a long time.
The reasons are simple: It’s one of the only cities in the United States where you can walk or bike to work, food, coffee, entrepreneur/social meetings, and home without getting killed. Most tech stars want a livable, unpolluted environment with the qualities of a European city.
It isn’t only because of the quality of life, it is because that lifestyle is simply so much more cost-efficient and productive in the long term, especially if you work in a creative industry.
You don’t have to be a rocket scientist to figure this out—but looking at the plans for Route 34 and other road widening projects around CT, apparently our friends in State (DECD, DOT, Governor, etc.) and City government just don’t get it.
posted by: westvillelocal on January 3, 2012 12:21pm
“People will know it started here. As much as it’s sad to lose a company like that, they’re going to have great success and always be known as a Yale and New Haven-minted company.”
And what exactly does this do for new haven and its people? Certainly not pay the rent or put food on anybodys table. This city wastes/gives away money on just about anything except for what what builds the local economy. Another ship has just sailed from new haven.
posted by: interesting on January 3, 2012 12:37pm
Abadi said he believes New Haven can become “a center for technology innovation,” including database management. “There are a lot of smart people around New Haven.”
Not in New Haven? Perhaps it’s just semantics…
posted by: Curious on January 3, 2012 1:01pm
Cambridge is completely gentrified. Yale is trying to make New Haven into something much like Harvard has done with Cambridge, ans yet the community fights it tooth and nail, and then screams for jobs.
Let this be a lesson - jobs aren’t coming to places like New Haven as long as places like Cambridge exist, or as long as New Haven stays as backwards as it is.
posted by: anon on January 3, 2012 1:14pm
Westvillelocal - you’re right. The hundreds of millions of dollars that Malloy is pouring into specious “economic development” projects, like moving a Maine laboratory into the middle of the sprawl zone in Farmington, would be enough to create improved sidewalks, a real bus system, a network of bicycle lanes, and decent train service within every CT city.
That would do more to bring high value companies here than any “incubator” program, and as a major side benefit, it also would create more local jobs given that sidewalk/transit construction creates many times more jobs per dollar spent than road construction.
posted by: newhavengill on January 3, 2012 1:24pm
Congratulations Hadapt!
The more success stories from New Haven the better. I wish you could leave the office in New Haven but I understand (sadly). Will folks in New Haven be allowed to work for Hadapt remotely? It would be great to keep the jobs and skillset in New Haven.
Good luck.
posted by: Daniel Boardman on January 3, 2012 2:58pm
I submit that the venture capitalists couldn’t care less if Hadapt was located in a European-like city.
They said, basically, if you want the 9.5, you locate in Boston or Palo Alto.
Palo Alto is nothing like Amsterdam.
The fact is that there are many more “smart” tech people in those two locations as compared to New Haven.
It isn’t an issue of New Haven being “bad” as much as it is the two locations, demanded by the financiers, as being excellent.
posted by: Pedro Soto on January 3, 2012 3:51pm
Daniel’s got it right. At the present time, ground zero for high-tech/biotech venture capital is Cambridge and Palo Alto. Palo Alto is car/suburb central with office parks as far as the eye can see. Anon’s point would be completely nullified had they moved the company to Palo Alto.
There is far, far more to be done than simply having walkable and bikeable neighborhoods. While that is a component to making better neighborhoods, it is also equally as important to figure out ways of bringing in both local and major players to set up camp inside those cities. UI just took their downtown workforce and is now popping them in Orange. I’m sure the workers aren’t going to be too thrilled, but the fact is, the economics of going suburban for UI worked in it’s favor, not against it. Until that changes, the greenfield office park will still be where many business automatically go for.
It’s very exciting for business like this to be setting up shop in New Haven, even though they have to move to get funding. The more startups this city can lay claim to, the more it will end up being the destination.
posted by: Anderson Scooper on January 3, 2012 5:49pm
Does Yale have a stake in this company? It sounds like they do, and if so, with plenty of venture capitalists lined up, how does the University permit this venture to abandon New Haven?
Sure, Cambridge might be preferable. But is there any argument that in the age of the Internet, New Haven wouldn’t be workable?
If we want to build a successful tech environment, we shouldn’t allowurselves to be used and abused….
posted by: anon on January 3, 2012 7:13pm
Pedro: Palo Alto might as well be in another country entirely. Most top tech businesses in the Northeast are moving to Cambridge, including Schlumberger, Pfizer, and Hadapt from CT among many others. The issue isn’t just where employees are to begin with, it is where the best employees have chosen to live in the first place and whether they would consider moving to a less desirable urban locale. You really can’t separate the two issues, as you seem to suggest is possible. Companies are starting to move to NYC, now, too, even though that city had very little in the way of tech base. It is because of the environment and it’s wrong to claim otherwise just because Palo Alto isn’t a city (BTW those employees all commute from San Francisco- which is)!
posted by: JAK on January 3, 2012 7:39pm
The issue is a community of talent and shared purpose. The density does not exist yet in new haven. All the more reason to celebrate and thank, yes THANK Higher One for choosing to stay in New Haven. Thes guys could have gone anywhere. But instead the new alder person leads a protest group to demand community benefits and job preferences.
NHI should do more of these in-the-weeds articles until we understand what drives business development and, yes eventually well paying jobs.
posted by: robn on January 3, 2012 9:56pm
3/5,
Nobody is blaming unions because they have little to do with creative entrepreneurialism and are just focused on putting in a 9 to 5 and getting as much as they can for their own collective bargaining units.
posted by: Curious on January 4, 2012 1:23pm
@ Anderson,
There is an entire department at Yale devoted to patenting tech and spinning it off.
Not sure how obligated they are to keep this in New Haven. It seems like Hadapt got a start, and then were free to go where they wanted; when they got the venture capitol, they headed out for better pastures.
posted by: Curious on January 4, 2012 1:25pm
Stop using Pfizer as an example of businesses leaving CT in this context.
Pfizer is contracting, not expanding. They are going to close the Groton CT location and move everything left to Cambridge.
Cambridge is ideal because the town lets Harvard do what it wants, which is make a world-class research facility and nice community. This is unlike New Haven, which fights Yale tooth and nail all the damn time.
posted by: anon on January 5, 2012 7:42am
Malloy is spending hundreds of millions in taxpayer dollars to move a lab from Maine into the middle of Hartford’s urban sprawl. Corporate welfare. He is also spending $100M to create a few jobs in the Hartford suburbs like Cigna and ESPN which would have stayed here anyways.
Not only will this wrongheaded move help serve to destroy the State’s environment and further cut off people in our cities from new jobs, it is a waste of money. That $200 million+ could easily have been put into Hadapt instead, keeping it here. Or into the infrastructure around Science Park (housing, transit, walkability, better urban development, job training for Newhallville), keeping even more companies like Hadapt from moving in the first place.
The State just doesn’t have a clue.
posted by: Curious on January 5, 2012 12:28pm
Giving that money to Hadapt wouldn’t ensure they would stay here. Better to spend that money on New Haven and make it a place where people want to stay.
I doubt that in this economy that Hadapt could have failed to draw 30 software developers to CT to work here. This is more about VC and what they want than Hadapt.
Also, giving Hadapt money to stay would just result in people from Newhallville marching on the company and demanding jobs…which would not happen, given that most of them are probably not software developers.
