The sight-restoring implant made by Second Sight is the most advanced prosthetic to date.

By Katherine Bourzac on February 15, 2013

A prosthetic device that can restore some sight to the blind has been approved by the U.S. Food and Drug Administration. The company that makes the device, Second Sight, based in Sylmar, California, can now market the retinal prosthetic to patients with advanced retinitis pigmentosa, a degenerative eye disease that can cause blindness. This is the first approved treatment for the disease in the United States.

“This enables people who are completely blind to see enough to improve their mobility,” says Mark Humayun, a professor of biomedical engineering at the University of Southern California in Los Angeles who has been developing the device for the past 25 years. “It allows people to make out the sidewalk and stay on it without twisting an ankle, see unexpected obstacles like parked cars, make out a table, see someone coming through a doorway,” he says. Some patients can make out large letters, but the main function of the implant is to give patients enough sight to restore mobility.

The device, called the Argus II, has three main parts: a glasses-mounted video camera; a portable computer; and a chip implanted near the retina. The video camera sends image data to the computer, which is worn on a belt. The processor converts the image data into electrical signals that are beamed to a chip implanted near the retina. The signals are then sent to an array of 60 electrodes that stimulate the retinal cells. These electrodes essentially do the work of the light-sensing cells that have degenerated. So far, the system can’t help patients make out different colors, but it can provide them with enough visual sensation to sense the outlines of things nearby.

The Argus II was approved for use in Europe in March 2011 (see “A Bionic Eye Comes to Market”) and has been implanted in 30 patients in a U.S. clinical trial that started in 2007. The company has not announced its pricing structure in the U.S., but the devices retail for $100,000 in Europe, a price based on the expectation that the implant will last 10 years. Humayun says surgeons around the country, including those in Los Angeles, San Francisco, Philadelphia, and Baltimore, have been trained in the surgery to implant the device.

An estimated 100,000 people in the United States suffer from retinitis pigmentosa, a disease that slowly kills off the light-sensing cells in the retina, starting with the rod cells responsible for periphery and night vision, and eventually the cone cells, which provide central vision. The result is a gradual tunneling in of the vision, leading eventually to complete blindness. Humayun estimates that there are about 2,000 Americans in this late phase of the disease that would benefit from the device.

“This is a really exciting day—this is the first approved treatment for retinitis pigmentosa,” says Jacque Duncan, professor of clinical oncology at the University of California, San Francisco. There are some drugs in clinical trials, and there is some evidence that vitamin A slows the disease’s progress, but until now there has been no way to restore lost vision to the blind. “It’s very exciting to reach this point.”

Existing devices like pacemakers and cochlear implants also use electrodes to interface with the body. But none are as complicated as the retinal prosthetic, says Humayun. Cochlear implants use up to about 20 electrodes; the Argus II uses three times as many, all of which have to be wired up in a compact, biocompatible case that won’t overheat, and can tolerate the frequent movements of the eye. “This is the most complicated medical implant there is, in terms of the number of electrodes,” says Humayun.

Humayun says future software developments will expand the capabilities of the Argus II. The company is developing software that will enable the device to stimulate patients to see color by providing electrical signals at different frequencies.

Bitcasa’s limitless storage service is a cool idea, but it needs work.

By Rachel Metz on February 18, 2013

Imagine never having to worry about running out of space on your laptop, tablet, or smartphone for pictures, videos, or documents; or even having to remember where you saved a file. It’s a wonderful idea and we’re getting closer, but we aren’t there just yet.

I got a glimpse of this future while trying the latest service from Bitcasa, a Mountain View, California-based startup that wants to take cloud computing to its logical conclusion: allowing access any file, any time, no matter where you are, so long as you have Internet access. (Bitcasa does cache a number of your files on your machine so the files you use the most can be viewed offline.)

Previously in an open beta, Bitcasa left that designation behind this month. The company also announced an updated Mac application, an iOS app, and the arrival of a “freemium” model: anyone can sign up for the service and get 10 gigabytes of free storage, or pay $10 per month to upgrade to the infinite storage model (or $99 for the year, though the price is $69 for that upgrade from now until the end of February).

Several companies provide easy-to-use cloud storage. Dropbox, one of the most popular, offers users two gigabytes of free storage and its plans start at $10 per month for 100 gigabytes, or $99 per year. That sounds reasonable, but in America, we like our cloud storage capacity like we like our fast food: bigger. And nothing is bigger than unlimited, right?

With that in mind, I decided to test Bitcasa’s Infinite service on my own MacBook Pro, a Dell laptop I use for work, and my iPhone.

The company’s file-storage utopia is a great idea, especially as we increasingly switch between laptops, desktops, smartphones, and tablets, and gain reliable access to fast, wireless Internet. But to get us to this digital Shangri-la, Bitcasa has plenty of work to do.

From the user’s perspective, Bitcasa is fairly simple. You install the software on your computer, and, much like when you slide a memory stick into a USB port, a little green icon pops up called Bitcasa Infinite Drive. In addition to offering software for PCs, Macs, and iPhones, Bitcasa offers an Android app, an app for Windows 8 and RT machines, and even an extension for Google’s Chrome Web browser.

This drive sits on your computer desktop, and you can copy files to it by dragging and dropping them into it, or save them directly to it so they’re stored there and need not be kept on your computer.

You can also mirror folders, which means that Bitcasa will copy the contents of a folder to your drive, but you’ll also keep the items on your computer so you can use them when you aren’t connected to the Web. Bitcasa will keep track of any changes you make to files in these folders, and keep them synched with the cloud-based version. If, like me, you’re horrible at remembering to back up your files, this is an easy way to do so.

This simplicity is the coolest thing about Bitcasa: It’s easy to figure out how to add files to your cloud, and find them once they’re in there (though keep in mind that it can take a long time to upload large files). All data you upload is automatically encrypted, too, which should help reassure those concerned about storing sensitive data elsewhere.

It’s also very easy to share files with others—you create a link to a file or folder on your computer or on Bitcasa’s website, and e-mail it to your friends.

Another neat Bitcasa feature is the ability to see older versions of your files. This is especially useful if you’ve worked on a project over time and want to go back and see an earlier version, or if you delete a file and then realize you actually need it. You can access this through a Web interface, which I found a pleasant enough way to view Bitcasa files, despite its irritating white-text-on-a-black-background theme.

Unfortunately, in practice, I experienced some difficulties with the service. Initially, it was very slow to show changes on my different devices, be it to files I modified or new files I added to folders in my infinite drive (40 minutes to add a large folder of notes files, for example). I often felt it would have been faster to just e-mail these things to myself. This improved, however, after I downloaded an update to the software.

But files didn’t always go where they were supposed to when uploaded, such as a slew of images from an SD memory card that somehow ended up in the main Bitcasa drive, rather than in the folder with the rest of their batch.

There was another problem, though admittedly I couldn’t determine if this was the fault of my machines, Microsoft Word, or Bitcasa itself: Though I tried repeatedly, I couldn’t upload a Word document to Bitcasa on my Mac, make changes to it on my PC, save those changes to Bitcasa, then open it up again on the Mac (or vice versa). Somehow, the files always got corrupted or disappeared altogether. I had someone try replicating the problem on a Windows 8 machine and a Macbook Pro and they didn’t experience the same issue. I asked Bitcasa CEO and cofounder Tony Gauda about this, and he said his team would try to reproduce it internally but he didn’t think it was something they had seen so far.

I also had problems with the iPhone app. I briefly used a test version, then switched to the first version Bitcasa rolled out publicly. This one crashed nearly every time I opened it (I’m not the only one this has happened to, according to reviews in the App Store). An updated version worked better, allowing me to view photos, videos, music, and other files stored with the service, but it seemed slow to access files.

Two standout features here were the ability to download files to the iPhone so you can view them offline, and the capacity to connect your camera to Bitcasa so it will automatically upload a copy of any video or photo you take to the service. There’s no way to upload other files from the iPhone, though, which you can do on an Android phone with Bitcasa.

Bitcasa’s basic premise is a great one, and it’s clearly where computing and data storage are heading. First, though, it will need to work out the kinks.

(Reuters) – Investors worldwide pulled $3.62 billion from U.S. stock funds in the latest week, the most in 10 weeks after taking a neutral stance the prior week, data from EPFR Global showed on Friday.

The outflows from U.S. stock funds in the week through February 13 were the biggest so far this year. Investors still gave $1.81 billion in new cash to stock funds in the week ended February 13, the fund-tracking firm said, as demand continued for emerging market equities.

January was a strong month for stock funds, which reaped more than $18 billion in new cash in the first and last weeks of the month. Mom-and-pop retail investors regained confidence in the funds over the month, but started taking profits last week after the S&P 500’s monthly rise of 5.1 percent.

“Some of the momentum has slowed,” said Rick Meckler, president of investment firm LibertyView Capital Management in New York. “People are still taking profits,” he added.

The demand for equities went toward emerging market stock funds, which pulled in $2.44 billion in new cash. That amount still lagged the previous week’s inflows of $3.42 billion.

European stock funds lost fans for a second straight week this year with outflows of $38 million after investors pulled $264 million from the funds the prior week.

The S&P 500 rose just 0.5 percent over the weekly reporting period. Data showing that the U.S. trade deficit narrowed in December and strong international trade in China and Germany boosted sentiment.

Concerns over the euro zone debt crisis were rekindled, however, after European Central bank President Mario Draghi said the region would face further economic weakness.

Bond funds worldwide overtook equities with inflows of $2.58 billion, which was more than double their gains from the prior week. Investors who shunned U.S. stocks sought the nation’s bond funds, and gave $2.28 billion in new money.

“I think the immediacy of the ‘great rotation’ is way too early,” said Margie Patel, managing director at Wells Capital Management, on speculation last month that investors were moving out of bonds and into stocks.

“Fixed income investments have been too good of an investment for too many years for investors to just reverse course,” Patel added.

Emerging market bond funds grabbed $1.1 billion in new cash, which was roughly the same amount as in the prior week. European bond funds, however, suffered outflows of $1.19 billion, the highest in over a year, according to EPFR Global.

Funds that hold risky high-yield “junk” bonds had outflows of $207 million. Redemptions were milder than the previous week, when investors pulled $1.33 billion out of the funds.

Patel of Wells Capital said that outflows from high-yield bond funds are in response to yields on the safe-haven 10-year Treasury touching 2 percent in recent weeks, and that the funds will recover their inflows after Treasury prices rise. Friday, benchmark 10-year notes were last down 9/32 in price to yield 2.04 percent.

(Reporting by Sam Forgione; Editing by Bernadette Baum and Martin Golan)

(Reuters) – Inventors based in the United States led the world in nanotechnology patent applications and grants in 2012, according to a new study by law firm McDermott Will & Emery.

Nanotechnology involves manipulating matter that’s measured at the tiny “nanometer” length level. The diameter of a human hair is between 40,000 and 60,000 nanometers, said Valerie Moore, a patent agent and one of the authors of the study.

Nanotechnology patents come into play in everything from aerospace to medicine to energy, the study noted. For example, the technology can be used to incorporate antibacterial material into wound dressings, to increase the strength of car parts while decreasing their weight, and to enhance paint colors.

U.S.-based inventors accounted for 54 percent of the nanotechnology patent applications and grants reviewed in the study, followed by South Korea with 7.8 percent, Japan with 7.1 percent, Germany with 6.2 percent and China with 4.9 percent.

The study also looked at the geographic location of the owner of the nanotechnology patents and proposed patents. If an inventor works in the Silicon Valley office of South Korea’s Samsung Electronics Co, for instance, the U.S. is home to the invention, but the South Korean employer might own the patent.

McDermott’s intellectual property practice includes more than 200 attorneys and patent agents, and is one of the top ten law firms for nanotech patent and applications filings, according to information provided by the firm.

McDermott partner Carey Jordan noted that the percentage of patents issued to U.S.-based entities is not quite as high as the 54 percent of nanopatents with U.S.-based inventors. About 45 percent of the nanotechnology patents in the study were assigned to U.S.-based entities.

The study examined published U.S. patent applications, patents granted by the U.S. Patent and Trade Office, and published international patent applications that had the term “nano” in the claims, title, or abstract. Nanopatent applications were included to best quantify innovation occurring in nanotech, the study’s authors said.

The number of nanotechnology patents has grown continuously since the early 2000s, the study said. Between 2007 and 2012 the total number of U.S. patent applications, U.S. granted patents and published international patent applications grew from about 14,250 to almost 18,900.

The United States, the European Union, as well as Japan and South Korea, have increased funding for nanotechnology education and research since 2000, the study said.

Computer and electronics companies garnered the most patents, with International Business Machines Corp and Samsung topping the list. The fields of chemistry and biological sciences, which include medicine and agriculture, were next in terms of the number of nanotechnology patents.

Other leaders in technology patent innovation include the University of California, Xerox Corp, the Massachusetts Institute of Technology, and 3M Co.

(Reporting By Erin Geiger Smith; Editing by Nick Zieminski)

(This story was corrected to fix dateline and name of law firm in the first paragraph)

(Reuters) – Moving ideas from sketches on napkins to factory floors is often the toughest stage for a startup entrepreneur. Flextronics International Ltd thinks it can help with that.

The contract manufacturer, which produces the Xbox game console for Microsoft Corp and smartphones for Google Inc, as well as networking equipment and other electronics gear, has upgraded its campus in Milpitas, California, with equipment aimed at creating product prototypes for customers in a hurry.

China has become the world’s factory floor over the past decade as incentives, low wages and entry into the World Trade Organization made it a highly efficient workshop for everything from shoes to electronics.

But Silicon Valley companies as small as startups and as large as Google are increasingly looking to local contract manufacturers for help with design and early production of new electronics products, experts say. This reflects a nascent trend of “reshoring” manufacturing operations to the United States.

Flextronics and rival contract manufacturers like Foxconn and Jabil Circuit Inc already offer customers “value-added” help designing their products, advice on what components to use and whom to buy them from, and other value-added services.

Singapore-based Flextronics said it spent $12 million on the Milpitas upgrade, with plans to spend another $20 million in coming months. The idea is to meet growing demand from companies in Silicon Valley that want to get products to market faster, site manager Zahid Hussain told Reuters this week.

“Technology is changing. Time to market is critical right now,” Hussain said. “We’re providing turnaround time. We’re providing end-to-end solutions.”

Flextronics’ campus includes labs with metal detectors, guards and strict security procedures to protect the confidentiality of clients whose engineers are designing new products and producing prototypes.

Inside are cutting-edge machines that “pick and place” components on circuitboards, as well as 3D printers and X-ray and testing gear that Flextronics can use to turn a proof of concept into a prototype product in 72 hours or less, Hussain said.

Last year, Google looked to a local contract manufacturer that its engineers could visit conveniently instead of an Asian manufacturer when it wanted to design and produce its Nexus Q home entertainment device fast.

The Flextronics facility and others like it can be particularly attractive to small Silicon Valley companies facing tight deadlines to produce their first products, said Thomas Dinges, an analyst at IHS.

“You’ve got all these companies coming out with new stuff that’s totally different, and they realize they need a couple hundred or a thousand units, and if they don’t hit that, their company is dead,” Dinges said. “I’m going to use someone who is local who I know has done this before.”

(Editing by Matthew Lewis)

(Reuters) – AllThingsD, the widely read technology blog run by Kara Swisher and Walt Mossberg, has begun discussions with owner News Corp about extending or ending their partnership, sources familiar with the situation told Reuters.

According to these sources, AllThingsD’s contract with News Corp expires at the end of the year. One of the sources said Swisher and Mossberg have to deliver a business plan by next week to Robert Thomson, the former Wall Street Journal managing editor who will helm News Corp’s publishing unit as CEO after it is spun off.

The fact that AllThingsD’s contract is up this year is well known, and sources said the website is receiving a lot of “inbound interest” from potential buyers parallel to its talks with News Corp.

Among the names mentioned as having reached out to AllThingsD were Conde Nast, where Swisher recently signed to work as a contributing writer for Vanity Fair, and Hearst.

Sources also speculated that former Yahoo and News Corp executive Ross Levinsohn might be looking at the website given his new role as Chief Executive of Guggenheim Digital Media, which comes complete with “significant capital to acquire and invest in new media companies.” The private equity shop already owns Billboard, Hollywood Reporter, and Adweek.

AllThingsD has reported that AOL expressed interest in acquiring it in the past, but said those talks “were preliminary at best.”

Calls to AllThingsD were referred to a News Corp representative who declined comment. A Conde Nast representative declined comment. Calls to Hearst were not immediately returned. Calls and emails to Ross Levinsohn were not returned.

While AllThingsD is recognized as the brainchild of Swisher and Mossberg, News Corp actually owns the website and its name. However, according to provisions in their contract, Swisher and Mossberg have approval authority over any sale, the first source said.

Technically, News Corp could retain the AllThingsD name in the event of a sale, forcing Swisher and Mossberg to start a new venture under a different brand name. But historically in these types of situations a deal is usually worked out to allow the founders to take the company name with them as part of a settlement.

Sources described the website and conference business combined as profitable. It has grown into a technology industry must-read, and features a popular conference division known for snagging A-list corporate executives for intimate interview sessions. Apple’s Steve Jobs, Facebook founder Mark Zuckerberg, Microsoft founder Bill Gates, and virtually every other major technology executive has spoken at the D Conference, as it is known.

Earlier this week, AllThingsD’s well-regarded media writer, Peter Kafka, led a media-centric conference for the website that included panels with Intel’s Erik Huggers, Live Nation CEO Michael Rapino, and Netflix’s programming boss Ted Sarandos, among others.

The website has two more conferences on the docket for this year: a mobile one that was postponed until April due to Hurricane Sandy, and the main D Conference in May.

Sources described the relationship between News Corp and AllThingsD as amicable but stressed.

“Like all partnership, there could be more cooperation between the two,” said one source. “There is tension between AllThingsD and the Wall Street Journal, for example.”

As a result of management changes, over the last few years the website has reported to numerous News Corp executives, among them Gordon Crovitz, Les Hinton, and now Lex Fenwick and Robert Thomson.

Should the two sides reach a deal on a new contract, AllThingsD would be included as part of the publishing unit in the News Corp split.

(Additional reporting by Jennifer Saba; Editing by David Gregorio)

(This story corrects the 10th paragraph to show source said website is profitable in combination with conference business, instead of website is profitable. Corrects spelling of Erik Huggers name in paragraph 11 to Erik, from Eric)

Startups are bringing creative features to the small screen in hopes of luring iPhone, Android users away from the default browser.

By Rachel Metz on February 7, 2013

When surfing the Web on a smartphone, most of us stick with the browser that came with our handset. That experience can be clunky, though, and a slew of mobile browsers are trying to break into a market dominated by Apple and Google.

It’s a struggle reminiscent of the “browser wars” of the ’90s, in which Netscape Navigator and Internet Explorer fought for dominance on desktop computers—and also of the more recent battle for market share among IE, Firefox, and Google’s Chrome browser on desktops and laptops.

Mobile browsers like Opera, Rockmelt, Dolphin, and the brand new Futureful are sparring with the built-in browsers on the iPhone, iPad, and Android-running smartphones and tablets, hoping to grab a percentage of the growing market for surfing the Web on these smaller screens.

The odds of success appear slim for most contenders. According to data from Net Applications’ NetMarketShare, Apple’s Safari browser captured nearly 61 percent of the mobile browser market in January, while Google’s Android browser had more than 21 percent. (Google recently started including its Chrome browser on high-end Android devices, but Chrome’s market percentage is still tiny, according to NetMarketShare.) Opera Software’s Opera Mini browser came in third with about 10 percent of the market.

But as the smartphone and tablet markets expand and people shift much of their online time from laptops and desktops to mobile devices, mobile browser makers see an irresistible opportunity to innovate and—just maybe—become the preferred pocket-sized gateway to the Web.

Mobile-browser companies are fond of saying that the market leaders have mainly just taken a desktop Web browser and plopped it onto a smaller screen, creating an experience that isn’t great for smartphones in particular and doesn’t take advantage of mobile devices’ touch screens.

“It’s really frustrating,” says Eric Vishria, cofounder and CEO of mobile browser Rockmelt. “They really haven’t pushed the limits given how important this software is.”

Rockmelt’s free iPhone and iPad app tries to make browsing faster and more convenient by opening up with a full screen filled with squares of content determined by your interests, which it gleans if you allow it to connect to your Twitter and Facebook profiles. You can swipe interesting-looking stories to the right to save them for later (you can read these offline, too), or swipe to the left to indicate that you don’t like a certain type of story. You can post reactions to Web pages by tapping tags like “want” or “WTF” and follow friends and websites within the browser to see what they’re reacting to. Rockmelt shows items you click on in your content feed in a simplified view that includes, generally, just one large image and text; to see the content as it appears at its source, you tap a little sunglasses icon in the URL bar.

Rockmelt also attempts to overcome network latency issues by preloading content on its servers and piping it down to users. Vishria declined to give exact figures but says that Rockmelt has hundreds of thousands of users (there are also 4.3 million users of its discontinued desktop browser).

And Rockmelt has a cheerleader that any browser company would envy: Marc Andreessen, cofounder of Netscape, who sits on its board. The venture capital firm he cofounded, Andreessen Horowitz, is one of the company’s investors.

This kind of support signals an opportunity for mobile browsers to succeed, says Jason Davis, an associate professor at the MIT Sloan School of Management who studies innovation and entrepreneurship.

MoboTap, the company that makes the free Dolphin Browser, is betting on that opportunity. Dolphin, for the iPhone, iPad, and Android smartphones and tablets, aims to stand out with mobile-friendly features like the ability to set up unique gestures that load specific websites. You do this by tapping a little dolphin icon at the bottom of the browser screen and drawing your symbol—I made a “J” to take me to the blog Jezebel. Users can also pay $1 for Dolphin Sonar, which lets you shake your phone to activate voice controls for searching, browsing, opening new tabs, and sharing Web pages.

Dolphin’s products seem to be doing well. Its apps have been downloaded more than 50 million times, and the browser has about 17 million active users, says Edith Yeung, who heads up Dolphin’s marketing. She also notes that the browser is being preloaded on smartphones in Japan and China through partnerships with wireless carriers and device makers, and that Dolphin is talking to others who are interested in making it the default browser on phones.

Still, for any mobile browser, just getting discovered is an issue. Apple’s and Google’s application stores are extremely crowded, and many consumers wouldn’t even think of going beyond the built-in browser on their device. Rockmelt’s and Dolphin’s user figures are tiny in comparison with the millions of iPhones and Android smartphones that are snapped up each quarter, every one of which comes preloaded with a browser. In the fourth quarter of 2012 alone, nearly 200 million of the 217 million smartphones shipped worldwide ran on Apple’s iOS or Google’s Android platform, according to Strategy Analytics.

“Most people are probably not even aware they can download a different browser,” says Andrei Hagiu, an associate professor at Harvard Business School who teaches a course on the Internet browser wars.

This isn’t keeping new mobile browsers from coming, though. A new entrant to the field is Finnish startup Futureful, whose free iPad browser is focused on predicting what you’ll want to check out online and bringing it to you rather than making you go find it yourself.

Like Dolphin and Rockmelt, Futureful emphasizes browsing without typing, though it, too, will let you type in a URL if you really want to. Users sign in with their Facebook or Twitter account, and Futureful builds an ever-changing profile based on your interests. The browser uses this information, along with data about what similar users like, to recommend content in little tags that float across the top of the screen. As you use it over time, it will get better at determining what you want to see, says cofounder Jarno Koponen, and users can also mark items they like to help Futureful learn faster.

Like Rockmelt, Futureful has a big-name investor: Janus Friis, cofounder of Internet telephony company Skype.

Could too many alternative mobile browsers be a bad thing? Hagiu thinks so if each browser requires website makers to optimize their sites differently. On the other hand, if mobile browser companies adhere to a common set of Web standards, such as HTML5, this is unlikely to be an issue.

Right now, four out of every five minutes devoted to media consumption on a smartphone are spent using apps, according to data from comScore, while just one minute is consumed by mobile Web surfing.

Eventually, the proportion is likely to change as websites are revamped for the smaller touch screens and as mobile gadgets become more powerful computers. For now, though, these minority mobile browsers have some time to experiment.

Besides raising cash, crowdfunding can be a way to test product ideas and build relationships with future customers.

By Jessica Leber on February 11, 2013

Ram Malasani, CEO and founder of the 22-person company Securifi, isn’t the typical newbie entrepreneur you’d expect to find on Kickstarter, a wildly popular website where people can pitch projects and receive small pledges of financial support from anyone (see “10 Breakthrough Technologies, 2012: Crowdfunding”). But with weeks still left to go on its campaign for the Almond+, a reimagined Wi-Fi router that can also control connected home systems like a thermostat or lighting, Securifi has raised more than $340,000—far more than the original goal.

Malasani’s company wasn’t exactly starving for funds. Almond+ is a sequel to Securifi’s first Almond product, a smartly designed router that has already sold tens of thousands of units on Amazon since it launched at the Consumer Electronics Show a year ago. Fund-raising is “definitely the secondary reason” for his company to use Kickstarter, he says.

The vast majority of the 85,000 projects launched on Kickstarter to date are the work of individuals with a dream—not established companies, much less ones that already have significant revenue, successful products, or venture capital funding.

But some startups and even larger companies are now looking to crowdfunding sites to serve other business functions, from market research and product design to customer relations and manufacturing negotiations.

“Crowdfunding is the ultimate form of consumer research,” says Scott Popma, an intellectual-property lawyer who advises companies about crowdfunding. “You are not just asking people’s opinions—you are getting opinions with their money.”

For Securifi, the campaign is helping it do early marketing and solicit high-quality feedback from enthusiasts while the product is still in development—far preferable to hearing criticism or getting a negative review after it is released. Right now, as a third-party seller on Amazon, Securifi can’t contact most people who have previously bought products to ask about their experience, or to promote future features or products. “We now know very few of our customers,” says Malasani. “We’re just removing the layer between ourselves and our customers.” They’ve already received more than 700 comments and messages.

Game companies with huge fan bases are among the largest businesses that have taken to the Kickstarter platform. Double Fine Productions, a decade-old independent studio that has won several awards, raised $3.3 million on the site from 88,000 backers last year, aiming not only to finance a new game but to “develop it in the public eye.”

For Days of Wonder, a maker of digital and board games, using Kickstarter was also not about the money. The campaign it launched in January was primarily meant to help determine whether its employees should devote months’ worth of resources to making an Android tablet app for their popular iPad game. Some customers had been requesting it, but in reality, few people have Android tablets yet.

The company set a goal of raising $190,000, a threshold it felt would establish sufficiently promising demand. The money itself was so beside the point that the company canceled the on-track campaign midway through. CEO Eric Hautemont realized that iPad owners and board-game fans were donating, so it wasn’t helping answer the primary question about Android demand.

This experience points to the challenges of using Kickstarter as a research platform. “We learned a lot,” Hautemont says. “We’re planning to relaunch it in March, focused on Android.”

For Kickstarter, which takes a small percentage of funds raised by successful projects, it could be good for business to attract companies that set larger funding goals or have more resources to promote their campaigns, especially if its early growth slows. But the company is also trying to maintain its credentials as a launch pad for garage inventors. Already, its guidelines limit technology projects to those that have some DIY, open-source, or hacker appeal.

Other crowdfunding platforms geared toward more established startups might not mind inviting even the largest companies to participate. Procter & Gamble and General Mills are working with the equity crowdfunding site CircleUp, a platform currently limited to accredited investors; the companies hope to keep a better eye on new ideas bubbling up from startups on the site and possibly buy from (or buy) them. The JOBS Act, a federal law passed last year, could soon allow CircleUp and other sites to open up to average individuals who want a stake in a business.

As the venture capital industry becomes more risk-averse (see “The Narrowing Ambitions of Venture Capital”), technology businesses could take to crowdfunding sites at even later stages. Crowdfunding is even changing the way some traditionally conservative technology companies approach product development.

Semiconductor startup Adapteva, a five-person company in an industry where it is usually hard to get funding, has not been able to raise more capital since its initial $1.5 million financing from a small strategic investor, even though it has already brought in more than $1 million by selling its powerful, high-end mobile chips to military customers. Now the tiny company hopes to bring its technology to a more mainstream market. But to do that, it needs enough money to place a manufacturing order large enough to bring down production costs.

Its recent Kickstarter campaign for Parallella, a “supercomputer for everyone,” initially met with skepticism from visitors to the site. “Chips are usually made by very big companies,” says founder and CEO Andreas Olofsson. “We were claiming performance numbers that were beyond anything these multibillion-dollar companies had done, and nobody had heard of us.”

But the campaign eventually took off after the veteran team posted more convincing demos and took the unconventional step of open-sourcing its hardware designs. The company raised nearly $900,000 and is now racing to deliver thousands of its $99 boards by May to its new backers, mostly developers who will help create applications for the product. Through the enthusiasts he’s met along the way, Olofsson has learned about applications for parallel computing he’d never even thought of. “Now we just have to make it work,” he says.

Hybrid materials made of cardiac cells and carbon nanotubes might patch damaged hearts and provide muscle for robots made of living tissues.

By Katherine Bourzac on February 11, 2013

The tissues of the heart are mechanically tough and electrically conductive, and they keep a strong, rhythmic beat—properties that are tough to mimic in the lab. But a new hybrid material that combines cell-friendly gel, strong, conductive carbon nanotubes, and living cardiac cells mimics natural heart tissue more successfully than previous attempts. Eventually the new material could be useful in both medical and robotic applications.

The bionic tissues, made by Ali Khademhosseini, a professor at the Harvard-MIT Division of Health Sciences and Technology in Cambridge, Massachusetts, could serve as muscles for biological machines—moving, programmable living tissues that take synthetic biology beyond single cells. A lot of the things that natural tissues and biological cells can do, such as sense and respond to their environment, are hard for engineers to achieve with the synthetic materials used in conventional robotics. Researchers hope that building machines from biological materials like heart tissue will expand what’s possible. The new tissues can swim untethered in water, swing back and forth, and perform other moves programmed by controlling their shape and thickness.

If these materials turn out to be safe for use in the human body, they might also be used to patch tissue damaged by heart attacks. Researchers engineering heart tissues in the lab often use polymers and gels to provide cardiac cells with an environment in which they will grow and behave as they do in the body. The resulting materials have two critical flaws, says Khademhosseini. They don’t match the electrical conductivity of heart tissue, nor are they as mechanically strong.

“When the heart beats, cells respond to that mechanical force and release chemicals that encourage growth,” says Thomas Webster, a chemical engineer at Northeastern University in Boston, who was not involved with the work. And if the patch is less conductive than the rest of the heart, electrical signals might experience delays. If a patch without just the right properties is placed on a patient’s heart, it might not grow properly, and it might not be able to beat in time with the rest of the heart, says Webster.

The Cambridge group solves this problem by adding carbon nanotubes to tissue-engineering gels. The result is a squishy gel with a tangle of strong, conductive carbon fibers embedded in it. Khademhosseini seeded cardiac cells on these gels and studied their properties. The bionic tissues were similar in elasticity to rat heart—much more elastic than previous lab-made materials. They also had much better conductivity. And the tissues were better at heart tissue’s main job, beating in synchrony. Khademhosseini exposed the bionic tissue to various chemicals and found that it was it was relatively resistant to damage—perhaps because the carbon nanotubes provide electrical links between cells that can maintain communication even when under stress. This work is described online in the journal ACS Nano.

Webster says before any medical applications can be considered, researchers will have to demonstrate that carbon nanotubes are not toxic—especially since they are not biodegradable and would be likely to stay in the body for a long time. He notes that even if the carbon materials themselves are safe, the manufacturing process for nanotubes might leave traces of toxic metal catalysts.

Khademhosseini says the first use for the materials may be in biological machines used to assess and restore toxic environments or repair buildings. Last year, researchers demonstrated free-swimming jellyfish-like robots and walking biological machines built from heart tissues and polymers. But without conductive materials, their applications are limited, says Rashid Bashir, a bioengineer at the University of Illinois at Urbana-Champaign, who made the walking robot. “If you can pattern the base material, you could make circuits inside,” he says.

Large companies have crunched numbers for years, using consumer-spending habits and other insights to steer customers toward products and target users. But now a group of startups are helping smaller businesses find cost-effective ways to use their data to serve customers and improve their bottom line.

Recently, Jetpac, a free iPad app that turns your friends’ photos into a customized travel magazine, wanted a way to find its users’ best images, said founder and chief technology officer Pete Warden. But instead of saddling its team with the project, Jetpac wanted to hire data experts to help. So they sponsored a contest on Kaggle, a platform for data science competitions. Within three weeks, the competition’s top three teams had more than 85 percent accuracy in finding the best photos, and Jetpac had a solution to its photo quality problem.

“It helped us speed up our development and get a better result much faster than if we’d done it as an internal project,” Warden said. “It was pretty crucial for our product and it made a massive change in terms of the satisfaction the users were reporting.”

While Kaggle mostly works with larger companies that have accumulated more data, it’s the smaller businesses that often don’t need – or can’t afford – a full-time data scientist, said Kaggle founder and CEO Anthony Goldbloom. While some small businesses might balk at the expense of data – and hiring an in-house data scientist is certainly costly – business owners said the price of online data tools was worthwhile. Warden of Jetpac said that, at $5,000, the Kaggle competition was “a bargain.”

Then there are the small businesses specializing in carving a niche out of handling big data. When the brand-building agency Powerhouse Factories grew tired of using Microsoft Excel to manage customer data, it turned in 2007 to Tableau, a business analytics firm that creates software to help customers understand their data. In a recent collaboration, Tableau helped Powerhouse Factories show a client data detailing problems with queuing in their checkout lines, said Michael Cristiani of the analytics and data visualization group at Powerhouse Factories. Powerhouse Factories also used Tableau to show a client how their Facebook messages were affecting sales and customer engagement.

As a business with about 50 employees, including about a half-dozen who use Tableau daily, Cristiani said Tableau’s software was appealing because it didn’t require their company or clients to have a big information technology infrastructure. “The world runs on data and analytics,” Cristiani said. And small businesses aren’t starving for data – they’ve already got it. “They’re starving for the insights,” he said.

Small companies don’t need a trained information technology specialist to run the software, said Elissa Fink, Tableau’s chief marketing officer. Cristiani boasts that Tableau released Powerhouse Factories from the perpetual back-and-forth with clients because the company works with its customers on Tableau servers.

Data is not just for tech companies. Chad Burns, owner of Farmstead Table, a farm-to-table restaurant outside Boston that opened in August, uses the online service Swipely to process credit card payments and track customer data, such as birthdays and anniversaries, favorite meals, restaurant spending and even the day and time they visit. “Say it’s one of our best customers and they come every Saturday night and they love the salmon dish,” Burns said. “If I get salmon in, I can send them a note and let them know I have their favorite dish.”

Data from Swipely helps the time-crunched restaurant owner target customers with the right messages and garner repeat business, Burns said. “I still cook every single day,” he said. “The Swipely system captures all the personal information, all the things that we don’t necessarily have time to capture ourselves.” It can also show merchants how their social media activity – and even the weather – affects daily sales.

Story to College, a startup that helps students write college application essays, uses a combination of student evaluations and the tried and true data analysis tool Google Analytics, which culls data from the company’s website, to measure the outcomes of its courses and online tools, said founder and chief executive Carol Barash. By tracking students on the Web site, Barash learned how frequently they clicked on its stress reduction resources. “They use those exercises a lot,” she said. “We watched where they were spending their time and it clued us in to where we should develop more content.”

Using data in your business takes patience, Barash said. “You don’t always get the quick answer,” she said. “The answers might not be obvious.” If a data point is surprising, she said, take time to consider what the data show and possible next steps. “If you take action too quickly,” Barash said, “it might not be the right action.”

(The author is a Reuters contributor)

(Editing by John Peabody, Ryan McCarthy and Brian Tracey)