Skip to Content

Finding Foes Faster

Innovative Biosensors has a kit that makes finding pathogens much easier – and with little training.

Company: Innovative Biosensors HQ: College Park, MD Founded: 2003

Management: Joe Hernandez is founder and CEO. He previously worked in marketing, sales, and business development at Digene Corporation, Affymetrix, and Merck.

Investors: In May 2005, the company raised $3.5 million in Series A financing led by Harbert Venture Partners, LLC. Other investors include New Markets Growth Fund and the Maryland Venture Fund. The company was previously funded by grants. Researchers at MIT developed the core technology, called CANARY (Cellular Analysis and Notification of Antigen Risks and Yields), through funding from the Defense Advanced Research Projects Agency (DARPA) and the U.S. Army Soldier and Biological Chemical Command.

Business Model: The company licensed the CANARY technology from MIT Lincoln Laboratory. It has used CANARY to create biosensors for the detection of pathogens. The original innovation by MIT researchers created a sensor that gave “cells that comprise the body’s first line of defense against viruses and bacteria the ability to glow like jellyfish in the presence of contaminants,” according a 2003 press release announcing the breakthrough. Innovative Biosensors’ first product detects E. coli bacteria and is intended for use by the food preparation industry. The detection kit consists of two small centrifuges, a luminometer, and analysis software. The kit is able to detect pathogens in just five minutes – instead of requiring that samples be sent to a laboratory, which takes up to 48 hours. Furthermore, the test can be conducted by someone with minimal training. Future target markets include animal health, bio-defense, and human health care, including drug discovery and disease diagnosis.

Competitors: Biacore, Oxford Biosensors

Dirt: Hernandez did well to recognize the broad potential of the CANARY technology beyond defense applications. Not only did he start Innovative Biosensors by licensing the technology from MIT, but he was also able to efficiently underwrite the venture by taking advantage of government grants and an incubator in Maryland. On the heels of this funding, Hernandez has gone on the record as saying he predicts his company will break even in 2007 and could reap up to $70 million in sales by 2009.


One Size Doesn’t Fit All
There are many ways to bankroll a startup – and other alarm:clock news from the land of private venture funding.

It’s common wisdom that venture capitalists are keen on making big bets with their money. Even if it’s a long shot (which it usually is), VCs like to see a financial projection in which their $5 million investment turns into $100 million after just a few years. Of course there’s the downside: the $5 million plummeting to zero.

There are plenty of ways to start a company, however. We’ve encountered a range of approaches over the last week. Although we found one example of the “big bet” approach, we also encountered a mid-sized investment with a well-defined target market and a classic bootstrapping scenario, in which feisty entrepreneurs are eschewing venture capital dollars and trying to go it alone.

One can only imagine the kinds of eye-popping projections Caspian Networks, a San Jose, CA-based developer of routers, must have shown its investors when the company first came on the scene in 1999 – since U.S. Venture Partners, New Enterprise Associates, Lucent Venture Partners, WorldCom Ventures, Vulcan Ventures, Alloy Ventures, and Applied Technologies all lined up to contribute a total of more than $140 million to the startup by late 2000. They accepted Caspian’s claim that it could challenge Cisco’s dominance by building a smart router up to 1,000 times faster than a typical router.

By 2002, though, Caspian was unable to deliver on its claim or land any significant customer base. Consequently, investors decided to scrap the initial business plan and re-start the company with a new approach. Now, using the same core technology that first mesmerized investors, a humbler version of Caspian is building routers that help service providers control, manipulate, and monitor IP-based traffic on their networks. More simply, the company helps to ensure that packets aren’t dropped. This is particularly important to clients like Northrop Grumman, a defense contractor.

Indeed, Caspian just closed a round of $55 million in funding. Investors include Oak Investment Partners, U.S. Venture Partners, Morgenthaler Ventures, New Enterprise Associates, Alloy Ventures, and ABN-AMRO.

According to a 2001 Wired article, the execs at Caspian used to “tell the people it offered jobs to that they had to give an answer before they left the building. Caspian says 97 percent of its offers were accepted.” Kudos to the 3 percent who told interviewers to shove off. Let’s hope the joint is now being run with a bit more humility.

Another company pursuing a big payday for its investors is Quorum Systems, a San Diego, CA-based startup. It’s creating a chip that allows both Wi-Fi and cellular functions to operate at the same time in a handset. Quorum plans to overcome the separation that currently exists between wireless data networks (such as the one at Starbucks) and the wireless cellular networks that connect mobile phones, which would create unrivalled network coverage for people using dual-mode handsets.

In May 2005, the company raised $15 million from Greylock Partners, Kleiner, Perkins, Caufield & Byers, and Enterprise Partners Venture Capital. To date, the company has raised $24.4 million.

While a number of other chip makers have been able to make such dual circuits, Quorum claims its success will come thanks to a low-cost design that handset manufacturers will be able to afford. If Quorum’s chip can find its way on to these handsets – a risky bet because the market is so young – the opportunity looks good. Some market researchers believe dual-mode phones could break through 100 million units by 2010.

With all the big bets being placed, it’s always refreshing to come across a startup that is self-funded and has a relatively modest approach to building a business. Bootstrapped Stamford, CT-based startup Indeed is offering a search engine for jobs. The company was founded by Paul Forster and Rony Kahan, who previously developed a finance jobs site,, which they sold to Financial News in 2003.

Their new venture, Indeed, is an aggregator that indexes more than 500 job sites, including and Hotjobs. The company also powers job searches on other sites, starting with and And the service allows users to create custom searches, say, “engineer - Sacramento - part time” – and have the results delivered via email, MyYahoo, or other RSS feed readers.

Rather than charging subscriptions, as some other job sites do, Indeed earns its revenue from advertising – a model that worked well for search aggregators in other sectors, notably, travel.

Keep Reading

Most Popular

This new data poisoning tool lets artists fight back against generative AI

The tool, called Nightshade, messes up training data in ways that could cause serious damage to image-generating AI models. 

Rogue superintelligence and merging with machines: Inside the mind of OpenAI’s chief scientist

An exclusive conversation with Ilya Sutskever on his fears for the future of AI and why they’ve made him change the focus of his life’s work.

The Biggest Questions: What is death?

New neuroscience is challenging our understanding of the dying process—bringing opportunities for the living.

Data analytics reveal real business value

Sophisticated analytics tools mine insights from data, optimizing operational processes across the enterprise.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.