@LARGE
Whiteboard wars

By Scott Kirsner, Globe Staff, 4/17/2000

Yonald Chery is girding for the battle of the digital whiteboards.

Chery is the affable founder and chief technologist at Virtual Ink in Somerville. The company makes an incredibly cool product, the $499 mimio whiteboard capture system. You affix the mimio capture bar - it's thin, and about two feet long - to the side of a whiteboard, using mimio's built-in suction cups. You plug it into a PC, and you sheath the whiteboard markers in special jackets that emit ultrasonic signals, so that the capture bar can track their position. (It also knows which color marker you're using.)

Then, as you write, sketch, or diagram stuff on the whiteboard, it's all captured on the PC. Handwriting recognition software can turn your scribbling into a snappy Microsoft Word file. You can share the presentation with others (like colleagues who fell asleep the first time around). And when it's played back, you can watch it unfold sequentially, or fast-forward to specific spots.

Problem is, another company, Electronics for Imaging of Foster City, Calif., came out with a very similar product last November, two months after mimio hit the market. EFI is publicly traded (Virtual Ink is not), and the company already has a large ''installed base'' of customers for its Fiery product line, which helps manage high-end digital color printing.

Also, in February, EFI was issued a patent for one piece of the system - a ''marking device for electronic presentation board,'' in patent lingo. (Translation: the electronics-laden jacket that holds the marker.) Jim Etheridge, EFI's general counsel, says: ''You will see from our history that we're very aggressive in defending our patents,'' and points to a seven-lawsuit winning streak.

Virtual Ink counters by saying it has a patent just days away from being issued, which covers technologies that are part of EFI's product. Litigation between the two is a distinct possibility, if the market for digital whiteboards proves big enough to be worth fighting over.

But the competitiveness of this emerging market doesn't give Chery pause. Instead, he and Virtual Ink seem energized by it. EFI, with its successful Fiery product line and $3 billion market cap, won't live or die based on what happens with its digital whiteboard product.

Virtual Ink will. So its only path, really, is to grow quickly, sell as many mimios as it can, and try to devise better technology and more useful features than EFI. (And keep its fingers crossed that the dozens of patents it's applied for yield a patent portfolio stronger than EFI's.)

Tomorrow, at the spring Comdex trade show in Chicago, Virtual Ink will announce a partnership with RealNetworks to create ''Boardcast,'' a way of linking audio with whiteboard presentations. The synchronized sound and pictures can be streamed live over the Web, or stored for later playback. Imagine taking a correspondence course in cartooning online, or watching John Madden analyze plays while a football game is in progress on your TV.

The company also will announce a version of mimio tomorrow that can hook up directly to a printer - no PC required - to produce paper copies of whatever is on the whiteboard.

Virtual Ink chief executive Greg McHale is in the process of raising a third round of venture capital this month. CMGI @ventures will likely continue to help fund the company, even though Virtual Ink is the only hardware investment in its portfolio.

Virtual Ink has just passed the 100-employee mark, and is expanding into another floor of its Somerville headquarters, a former Hood ice cream storage facility that still has metal freezer doors built into some of the brick walls.

Chery is a technologist through and through. He carries a Sprint cell phone with Internet access and two hand-held computers. He got his bachelor's and master's in electrical engineering from MIT and, while doing graduate work at the school, he came up with the idea for mimio.

''I was teaching digital systems design in the early 1990s, and the students were copying stuff down [from the board] but not paying attention,'' he says.

There were already expensive whiteboards on the market capable of creating printed output, but they were prone to breaking down and not easily transportable. That led Chery to start brainstorming about a small, portable device that could follow the location of his marker and transfer the data to a computer.

Chery entered the MIT $50K business plan competition in 1997, and won $10,000 as first runner-up. Some of the judges told him later that he would've likely won if he'd convinced them that the mimio system could actually be built. In June 1997, he started to build it with a group of friends working out of his dorm room, and by July they had a crude prototype hooked up to a PC.

The product took longer than Chery had hoped to reach the market, eventually shipping in September of last year.

Despite devoting a considerable amount of time to the company, and getting married last summer, Chery has continued to work on his doctorate in electrical engineering.

''I'm planning to walk in June,'' he says hopefully, ''though I still have to finish my thesis.''

Chery's biggest goal, though, is to dominate the digital whiteboard market, and to make ''mimio'' a verb. ''I want people to say, `Let's mimio that whiteboard.'''

To do that, he plans to introduce several new hardware products in the coming months. And he plans to create new applications for mimio, such as allowing music teachers to draw staffs and notes on a whiteboard and have them played on the computer, converting statisticians' data instantly into charts and graphs, or combining maps with mimio to do mission planning for the military.

''We have to keep innovating or we'll be blindsided,'' Chery says. ''We have to constantly be aware of disruptive technologies and constantly be thinking about the next new thing.''

And thinking about it before their rivals in Silicon Valley.

This is a very evenly matched competition. Virtual Ink was first to market and has the advantage of being a nimble start-up. But EFI is more experienced at sales and marketing. The patent issue is a wild card, and a new entrant (or two) could spark a price war that would hurt all of the competitors.

Now that the browser battles have subsided, the whiteboard wars could be next.

Two hits, many misses

Well, I did only slightly better at picking last week's MIT eBusiness Awards than I would've done by tossing darts at the list of 35 finalists in seven categories.

I guessed two winners correctly - TRUSTe for the Web Responsibility Award and Healtheon WebMD for the Industry Transformation Award. I came close to correctly picking eBay to win the Global Reach Award, but its application form (which the organizers were kind enough to give me access to) was pitifully scant, so I took Monster.com instead.

Congrats to all of the winners (the full list is at www.mitawards.org), and here's hoping the judges make fewer errors next year.

Scott Kirsner is a Boston writer and a contributing editor at Wired, Fast Company, and Boston Magazine.