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May 03. 2014 1:24AM

Mike Cote's Business Editor's Notebook: Technology's FRIEND


 


Carbonite CEO David Friend 


 

From co-founding ARP synthesizers in the '70s to his latest and greatest success running online data backup service Carbonite, Boston entrepreneur David Friend has had an enviable run. He co-founded his first business straight out of college and secured endorsements from The Who's Pete Townsend and other rock stars to help popularize his company's revolutionary instruments.

Friend, 66, will serve as the keynote speaker at the New Hampshire High Tech Council's Entrepreneur of the Year awards on Monday, when executives from Newforma, Scribe Software and Single Digits will be honored. The winner will be announced during the event.

We shared some of Friend's insights in last week's Business Editor's Notebook. Here are some more.

You can't really be an entrepreneur by just asking a customer what they want. Usually they can only tell you what is wrong with what they already got.

The biggest problem with most products, of course, is people don't do their market research. They just assume that "Gee, if I build this, it's so cool everybody is just going to want it." And after you spend a year building a product, that is not a good time to find that out. But that's what happens in many cases.

We did a lot of market research before we started writing code. How much would people be willing to pay for it? How much complexity would they be interested in tolerating? Things like that.

With Carbonite, you put in an email address and a password and that's it. It just backs up everything on your computer for one flat price. Most people thought we were nuts to offer unlimited backup in make any choices.

We started by promoting Carbonite on talk radio because talk-radio shows have listeners who trust them. If we could convince the talk-radio hosts to use our product and to talk about it on the air, then all of their millions of listeners would consider going out and doing the same thing. That lesson that I learned back in the '70s is still applicable today.

What we found was that businesses were buying our consumer product and then complaining about how we didn't have enough business-oriented features in it. So we came out with a version of the product that was specifically tailored to businesses, and it was a big success right from the beginning. We thought if we are going to invest in one side of the business or the other, we're better off investing in the SMB (the small and medium-sized) side of the business than the consumer side. So we've been putting a lot more emphasis on the SMB products than we are on the consumer now, though the consumer product is still doing very well. And it is still the majority of our income.

One experience always leads to another, for the most part. When I was running the synthesizer company, I developed a software tool to help me track trends in the music industry. That product became the subject of my next company, which was called Computer Pictures. Computer Pictures led to my third company, which was called Pilot Software.

Sometimes the thing that becomes obvious that you should do next is not within the framework of the business you are running ... (With) Computer Pictures, which did data visualization, it became obvious to me that what I needed to do was data analytics behind that. But that was too much of a stretch of that company to get into it, so it was better to just sell it, move on and start again.

Carbonite is at an inflection point right now because it's shifting from being a consumer-focused company to being a company that is focused on the small-business market. A year from now, it will be predominantly a business-focused company. To me, that feels like a natural time to bring in new leadership.

I was a science fair kid all throughout high school, and the music was just always an important side interest for me. I always knew I could be an engineer anytime I wanted to because I had plenty of experience at it even when I was in high school. I didn't really worry about it. I don't think I was ever serious about pursuing a professional music career, but it was a lot of fun to study it in college.

I play keyboard instruments and I used to sing quite a bit. I prefer classical and jazz. ... You need to do it all the time if you're ever going to be good at it, and that was kind of incompatible with running a company.

I've been involved in startups in New Hampshire for a long time. I used to belong to an angel investor group called the Breakfast Club in Nashua. Southern New Hampshire particularly is almost like part of the whole Boston scene. It's very close to being a Boston suburb. It has the advantages of having some tax advantages that attract people. It's nice; a little more rural. But it feeds off the same ecosystem of universities and R&D facilities that are all up and down the 93 and Route 3 corridor.

When I get on a train going to New York and start talking to the guy in the next seat, and he says, "Carbonite. Oh, I have Carbonite. I saved all my wedding pictures or saved my business records." That to me is the icing on the cake.

The 2014 Entrepreneur of the Year award event begins at 5:30 p.m. Monday at the Radisson Hotel/Center of New Hampshire in Manchester. Registration and ticket purchases at NHHTC.org. Tickets are $80 for council members; $100 for nonmembers.

Mike Cote is business editor at the New Hampshire Union Leader. Contact him at 668-4321 ext. 324 or mcote@unionleader.com.



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