Logical Innovation Wins MIT's $100K: Ksplice, Global Cycle

Not many college-based business plan competitions can claim they've given birth to over 120 companies that have cummulatively attracted hundreds of millions of dollars in venture capital, have had market caps in the billions, have been acquired by such leading companies as Cisco, MTV, and 3M or have gone public on their own like Akamai, net.Genesis, and C-Bridge Internet Solutions.

Although the finalists at this year’s MIT $100K Entrepreneurship Competition all come from different competition "tracks,” they share one common theme: logical innovation.

The business ideas that are cultivated at MIT are drastically different from the types of "Web 2.0" start-ups you'll read about on most blogs. The types of concepts that are brainstormed, studied, researched, prototyped, developed, and launched through MIT’s annual business plan competition tackle real-world problems with incremental technological innovation that provide solutions, such as preventing blindness and capturing energy from shocks in automobiles.

I like to describe these solutions as "logically innovative" because they mix current technologies with ideas that are feasible and don't require the adoption of too many technologies or too far advanced technologies. In other words, they're inventions that leverage existing technologies to provide a magnitude of value greater than what currently exists without over reaching their bounds.

A large part of this equation is studying and tackling one very specific problem.

Competition winners are chosen based on the feasibility of the new solutions, size of the market opportunity, value proposition, and whether or not people are actually willing to pay for their products.

This year’s top concept is rather simple.

First-place winner Ksplice, which walked away with the contest's grand prize check of $100,000, developed software that reduces the need to reboot an operating system when software updates are applied. Now you might be asking yourself, “Sure, those messages requiring me to reboot my computer are annoying, but is it really a problem that a company should be formed around?"

The answer requires a bit more investigation.

Millions of servers around the world, including the ones at Google, will always need to be rebooted when upgraded with new software patches. But these reboots create downtime and ultimately results in losses from incremental costs that ultimately add up to a lot of money. Reboots are required frequently, too. Think of every time a piece of a server application (MySQL, Operating System, Apache, etc.) needs a software patch.

By reducing this downtime, systems run longer, more efficiently, and reduce costs. While the programming to develop Ksplice might be complex, the software provides a clear, logical, and innovative step toward providing an increased ROI, which is something enterprise type companies are willing to pay for.

The solution becomes even more attractive when you think about its many applications: payment processing software, e-mail server, Web site server, storage server, router, operating systems, security software, and everything that runs in IT departments or anything that runs software. The need is ubiquitous. Especially in an economy where companies can't afford to lose sales, be vulnerable to security holes, or simply waste time that equals money.

Winner of the Audience Choice Award: Global Cycle Solutions

From Global Cycle Solutions' Web site: “In the summer of 2008, Global Cycle Solutions brought its first peripheral, an altered corn sheller attached to a bicycle, to farms and villages in Arusha, Tanzania. GCS’ peripheral did not only shell corn 40x faster than by hand, but it also brought an affordable service that saved rural villages from arduous manual labor.” Read more at GlobalCycleSolutions.com.

It was a record year for the MIT $100K with more than 260 submissions and over 1,000 participants. No wonder it's been named by BusinessWeek as "the most acclaimed business competition."

This is just the beginning for Ksplice and the competition's other start-ups. Which ones will grow rapidly and become success stories like Harmonix (mother company of RockBand), Akamai, Virtual Ink, or Zipcar (all companies which have their roots at MIT)? Time will tell. For now, the next steps for many of these companies will include securing a Series A financing round, perfecting prototypes, and launching products to market.

Here are some pictures from the event:

Although a bit cheesy, this year's event included game show type lighting effects with light routines similar to "Who Wants to Be a Million" inbetween presentations.

Originall, founded in 2006 by award-winning MIT-trained aeronautical engineers and MBA's, Terrafugia brought back the "Transition", the world's first flying car, to showcase outside the main auditorium. The concept won the $30,000  Lemelson-MIT Student Prize in 2006.

Start-ups, such as Levant Power, show cased their prototypes and concepts in the reception hall prior to kickoff.

Rodney Brooks, Founder of iRobot, gave the keynote. If you want to start a company, he emphasized you need passion, persistence, understanding of rejection, and devotion. A video of his speech is here.

Related links:

• MIT $100K
• Ksplice
• iRobot
• Global Cycle Solutions
• Terrafugia
• Levant Power