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From my first steps at Workable as an intern, I realized that being in a team with great people can only make you great. Using high-tech tools can make some magic with the numbers and your life quite easier in a Finance department, not enough though to succeed your starred goals. After four years I still heartily believe corporate environment & culture are the foremost values to boost your passion to build your career path.
Aris Toumpanakis –
Senior Accountant, Financial Systems
I love working at Workable because I get to work with a great product that customers love alongside intelligent teammates within an entrepreneurial and very inclusive culture. The leadership team are approachable and forward thinking making this a very exciting journey to be part of! Coming back from maternity leave, Workable has gone above and beyond to give me the flexibility needed to adjust to being a new mum whilst still providing exciting challenges and opportunities in my day to day role.
Kelly Paterson –
Senior Manager, Account Management
Since starting at Workable, I’ve had opportunities for growth and development not only in my position, but personally as well. As part of the dedicated Customer Support team, I’ve had the privilege of working directly with our customers, the Account Management team and so many others, all of which have displayed the care and dedication that Workable offers to everyone, no matter their role.
Hayley Haggerty –
Customer Support Specialist II
It’s lovely to be a part of the Workable team at such an exciting point in their journey. I really enjoy my role as a Solutions Consultant as it gives me the opportunity to work on interesting projects with prospects and existing customers, helping them realize maximum value in our product. While the work is challenging and very rewarding it is all underpinned by the lovely team I am lucky to be a part of, plus we get the flexibility to WFH, remotely or from the office!
MatchMine: the Boston Personalization Company's Fast Rise & Abrupt Ending
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In today’s modern era of connected web services, APIs, and apps, why is it that personalized recommendations are still a siloed, homebuilt solution for media companies?
If you have an account on Amazon, Pandora, iTunes, Netflix, Spotify, YouTube, or any other service, you have to train each one to learn your personal tastes.
Wouldn’t it be amazing if there was a product where you could plug into new services andmagically, it would already know what you like or don’t like? Imagine if you signed up for a new account on Hulu and it immediately started recommending the right TV shows for you.
Well, this idea and technology did exist. It was the vision behind a Boston based company called MatchMine, a media discovery company which helped you find what you love across the internet. The company had a consumer product called a MatchKey, which was a graphical representation of your tastes in music, movies, video, etc.
MatchMine's MatchKey, a graphical representation of your media interests.
THE HISTORY OF MATCHMINE
The history of the company and technology goes back to some work that was being done by the New England Patriots organization. The Patriots have always been on the cutting edge in terms of how they leveraged technology and digital media to improve the fan experience. The organization was the first professional sports team to launch an official website and then offer streaming video.
Trent Adams, who was the Chief Innovator of the Kraft Group Sports Properties, originally came up with the idea to connect people to things they found interesting through an attribute-based system. Most recommendation systems work via collaborative filtering, meaning if a lot of people like A, B, and C, and you find someone else who likes A and B, they’re likely to like C as well. Collaborative filtering is popular because it’s easy. The algorithm doing the predicting doesn’t need to know anything about the particular items it’s recommending, just who likes what.
An attribute-based system takes the opposite approach, relying on a pre-determined schema of “attributes” for each and every item in the consideration set, and using an algorithm to spot patterns in the data that have predictive value. Pandora’s music genome project is an example. So is the system created by Boston-based Echo Nest, acquired by Spotify in 2014.
Adams pitched the idea to Jonathan Kraft, who liked the idea and wanted to commercialize it.
Mike Troiano was then signed on as the company’s CEO. Troiano remembers meeting with Jonathan Kraft, Robert Kraft, and Adams to discuss this new spin-off company. After exploring more of the details on the idea and technology, Troiano decided that it was too good of an opportunity to pass up.
The next steps was then focused on figuring out how to make the technology work and how to build out a business model.
MatchMine added Jim Butler as CTO and VP of Engineering, then Scott Oddo as VP of Science to help commercialize Adam’s model and build a platform around it. Troiano and his team focused on figuring out the market and revenue opportunities.
“There was a big network effect in the underlying science, in that the more data we had, the better at predicting preference we would become,” said Troiano. “To get up the curve faster we hit on the idea of embedding the technology on different third party sites, and set out on a biz dev exercise to sign them up.”
Here's a flashback video which explains the product:
The company launched at the DEMO Conference in the Fall of 2007 and quickly earned buzz as a promising technology. It landed pilots with media sites like Fuzz, FilmCrave, and Peerflix to replace homegrown recommendation systems that were typically cobbled together. MatchMine’s platform gave them a much better solution with better recommendations for consumers, leading to more deals with MediaMellon, Blogdigger and Odeo (the Evan Williams/Jack Dorsey startup that was the precursor to Twitter).
On the business side of the equation, MatchMine would make money by allowing publishers the ability to deliver highly targeted ad impressions to consumers and MatchMine would take a percentage of the revenue. CNET’s Rafe Needleman covered the story, saying the company now had both an underlying technology and a business model that made sense.
One of the key value propositions for consumers was MatchMine’s respect to one’s privacy. Although MatchMine knew a lot about what you liked, it didn’t know who you were, having deliberately excluded personally identifiable information (PII) from the MatchKey. Back then, the social media landscape was still emerging and consumers were not accustomed to sharing personal details with websites.
MatchMine Screenshot From 2007
MatchMine went on to raise $10M from the Kraft Group in September 2007 and the team grew to about 45 employees. The company’s VP of Marketing, Michelle Heath, has fond memories of the company.
“It was an interesting challenge to market something that was abstract," said Heath. "You couldn’t touch it or hold it, but your MatchKey was something you could interact with digitally."
The company had a lot of momentum, but there was a major factor outside of its control which would ultimately bring it down: the financial crisis of 2008. The credit crunch hit every industry, while the infamous R.I.P. Good Times slidedeck from Sequoia Capital made the rounds across the tech industry. A tough decision was made to shut down MatchMine.
It was an incredibly difficult time for Troiano. Based on the circumstances at hand, he tried to handle the situation as humanely as possible. He went on to write a blog post about the final day of the company and included links to the team, hoping that other companies would scoop them up quickly.
“Although it didn’t determine our outcome, we were wrong about how people felt about privacy," Troiano said, looking back. "It turned out consumers were happy to share their personal info on the internet, which facebook first proved and then took advantage of to great effect.
"We aspired to assemble a slide of the advertising juggernaut they built, but pulled the plug before we really got rolling," he added.
There are still times when I think back about MatchMine and the MatchKey I had set up. Although I didn’t have enough time to build an emotional attachment to it, I do believe the technology was very meaningful and I’m surprised another solution hasn’t solved this problem of personalize recommendations. It would be a much better experience for consumers. Viva la MatchMine...
I like working at Anaqua because of the location and community we have. Building lasting relationships that extend outside of work has been a part of my experience that I did not anticipate. I feel like there is no one that you cannot talk to or connect with. End of the month Birthday celebrations are a unique event at our office as well!
Paul LeMay –
Account Executive
It is exciting to come into the office every day and work side by side with a group of extremely passionate individuals working to achieve a common goal. As a company we have grown significantly within the past year however the strong collegial environment at Anaqua is still thriving. One of my favorite things about working at Anaqua is the ability to collaborate with my coworkers to provide innovative solutions to our client’s needs within the fast paced intellectual property landscape.
Jill Bourne –
Business Consultant
It’s exciting to work at a software company where my first impressions of Anaqua being an innovative, smart and friendly work environment continue to stay true today. To work at a company where team members are passionate about contributing to a similar goal, their opinions are valued and their collaboration with clients (many of the world’s top global brands) directly helps their business and supports our software enhancements, is truly a unique opportunity.
[Investor Profile] Sarah Hodges of Pillar: A Champion for Boston's Startup Ecosystem
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Sarah Hodges recently joined the venture capital industry by joining Pillar a couple of months ago. Pillar is a new VC firm in the Boston area launched by Jamie Goldstein. Over the years, Sarah has made her mark on the Boston tech scene in many different ways. From playing a key role in high growth companies like Carbonite, RunKeeper, and Smarterer... to bring the Boston tech community together through events and charitable organizations. Sarah is also a co-founder of Intelligent.ly, Boston's source for leadership development.
Keith Cline: Tell us about your background. Where did you grow up and how did you end up at Scripps College in California?
Birthday party photo of Sarah. Photo prop homemade by her parents
Sarah Hodges: In the middle of nowhere! I grew up in a small town called Merced, in the center of California, surrounded by farmland. It’s the kind of town where you spend your summers as a kid running from house to house all day until the sun goes down. My mother was a teacher and my father was a principal. Merced was a simple town - it was a big deal when we got our first Starbucks - so it was a culture shock when we moved to Seattle for high school.
Scripps College is a women’s college in Southern California. My grandmother attended Wellesley College, so I grew up hearing about the value of same-sex learning environment and the breadth of a liberal arts education. I fell in love when I visited the school; Scripps is on the National Register of Historic Places, and the campus is framed by sprawling lawns, citrus trees, and a rose garden, where we could cut fresh flowers. Not bad for a college student!
KC: Tell us about your experience as a Partner at Pavo Real, a women’s clothing company.
SH: Growing up, I dreamed of becoming Claire Huxtable from The Cosby Show. I was sure I wanted to be a lawyer, and applied to law school during my senior year of college. Two weeks before I graduated, I realized I wasn’t quite ready to grow up, and abandoned my game plan. I moved to Chicago, a city I’d never visited, with almost no money and no job. During my first week, I landed a gig at Pavo Real, a brick and mortar women’s clothing store, with locations across the country.
Sarah and her partner, Mindy Brush at the company's Newbury Street store
The store was born in 1978 from a Faneuil Hall push cart, and the founders were based in Boston. When I joined, the owners were slowly closing the retail stores, but the timing was ripe to bring the business online. They took a huge chance on me as a fresh-faced kid straight out of college, and made me a partner in the company. I moved to Boston, where we had a small shop on Newbury Street.
Sarah on a solo visit to Machu Picchu for a work trip to Lima
I launched our eCommerce and direct mail business, and reignited the production of our own clothing line in Lima, Peru. Lima really became a second home for me during those years. I miss so much about that city - my friends, the food, running on the Malecon, and learning about yarns in factories run by an amazing group of women. The experience was a truly wonderful opportunity to learn the ropes of of launching a new business, and I was grateful for mentorship from my partner, Mindy Brush.
KC: What brought you to Carbonite, then to RunKeeper and Smarterer?
SH: I looked up one day and realized that I wasn’t growing at the same pace. As part of a small team, the business had also become lonely. A recruiter came knocking from Carbonite, and I was intrigued. The company was a rocketship when I joined in 2009. The marketing team I joined was a growth machine, but it wasn’t all smooth sailing. When I first met my boss, Swami Kumaresan, he wasn’t convinced that the role was right for me. He was sure I’d get the itch to do something entrepreneurial, and placed me on ‘probation’ coming in. What a great way to enter a new company! We laugh about it now.
I sure was hungry for the experience of learning from a growing company, and proved him wrong in the end. We had a powerhouse team of operators, and I was fortunate to learn from people like Swami, and Ivana Flodr, and Rebecca Van Nederynen (who went on to help grow Help Scout). When a company is growing that quickly, you have no choice but to roll up your sleeves and learn on the go. Everyone on the team had a strong worth ethic, and it was exciting to see what we were able to accomplish together.
Sarah at the Rock & Roll Half Marathon with RunKeeper teammate, Jake Cacciapaglia
When I started at Carbonite, I loved the breadth of responsibility that came with working in an early-stage startup. As the company continued to grow and each of our roles became more specialized, I started to feel constrained. I was ready for a change, and met the CEO of RunKeeper, Jason Jacobs, through a good friend, Aaron White, who was doing contract work for the company. My intent wasn’t to leave Carbonite at that point, but as soon as I met Jason, I was immediately consumed by his passion for RunKeeper and his vision for the future of the company. I was running half-marathons at the time, so the opportunity to lead marketing at a running company seemed too good to be true. When I met the rest of the team, including my now good friend, Jake Cacciapaglia, it was a no-brainer. I was employee number nine at RunKeeper, and the time we spent together was pure magic.
KC: What prompted you to start Intelligent.ly?
SH: Dave Balter and I met in 2011, at the open house for a friend’s startup. Jennifer Lum and I had been kicking the idea around for a tech prom - a blowout party to make up for the lackluster proms of our high school years. Our friend, Cort Johnson, suggested that Dave sponsor the event. He jokingly retorted that he only sponsored things with his name on them. Game on.
Dave Balter Tech Prom Committee
Jennifer and I immediately went home and built a website, Twitter handle and Facebook page for the Dave Balter Tech Prom. By 8 am the next morning, a reporter was calling Dave to get the scoop; we hit him like a freight-train. He was bewildered, and could barely remember having met us!
Naturally, Jen, Dave and I roped Cort and Mike Troiano into forming a prom committee. In 30 days, we raised money and threw the 80s prom of a lifetime, complete with corsages, letterman’s jackets, and branded flasks. As luck would have it, Travis Kalacanik, Uber’s CEO, and Austin Geidt, who led expansion, were in town before the event, and stopped by the RunKeeper office, where I was working. Tech Prom became Uber’s launching pad in Boston. The night of the event, we looked around in awe; together in one room were over 500 members of the startup community - experienced entrepreneurs, startup newbies, and investors. The whole experience was a trip.
Sarah with Dave Balter and Mike Kowalchik, Smarterer co-founders after the closing dinner.
A few months later, Dave and I were still high from the experience of collaborating. He approached me about consulting for a company he’d founded, Smarterer. Mike Kowalchik, Dave’s co-founder, immediately won me over. Mike’s a brilliant technologist, and was erupting with passion for the business. Before long, a few month consulting gig turned several years on the management team in roles spanning marketing, operations and strategy. Dave, Mike and I went through the emotional highs and lows of building that company with a truly exceptional team, and came out on the other side of it as family.
Around the same time, Dave and I realized that we had a great rhythm working together, and wanted to re-create the energy of bringing together different pockets of the startup community. We saw companies starting to roll out peer-to-peer learning programs, and thought, what better place for the concept to succeed than in Boston? The idea for Intelligent.ly was born. In just under a week, we threw a launch party to build our mailing list, aligned with sponsors like Silicon Valley Bank, WilmerHale and CBRE, set up our classroom with furniture donated by Turnstone, and signed up experienced entrepreneurs and startup leaders who volunteered their time to teach 90-minute skill workshops. Aaron Lumnah, a student at Suffolk, joined on as an intern, and Scott Seiffer introduced himself and volunteered to facilitate our curriculum. The outpouring of support from the community was overwhelming, because that’s what Boston is - a community.
A recent Intelligent.ly Exchange session with emerging leaders in Boston.
Four years later, the company has evolved into a leadership development company, with Gabriela McManus at the helm as Executive Director. Through programs like Exchange, for new managers, and EMERGE, for high-potential individual contributors, we’ve impacted over 1,000 leaders from over 50 Boston companies. It’s still a mind-blower for me.
KC: You were an advisor to Flybridge Capital Partners, can you share more about your role there?
SH: Dave introduced me to Jeff Bussgang in 2012, and we immediately hit it off. My role as an advisor at Flybridge was to support and broaden the firm’s investment activities in the Boston region. I attended select partner meetings, collaborated with the team on events, and brought opportunities to the firm as I met interesting new entrepreneurs. Intelligent.ly and Flybridge were both deeply invested in supporting our startup community, and it was a natural fit from the start. I continue to be impressed with the level of mutual trust and respect that Jeff, Chip, David, Kate and the rest of the Flybridge team have for each other. It’s clear that they all love what they do, and have a great time together.
KC Why did you join the venture capital industry and join Pillar?
SH: After Pluralsight acquired Smarterer in November 2014, I joined the company’s management team. I got an apartment in Salt Lake City, where the company is based, and spent a year logging over 200,000 miles on Delta airlines back and forth to Boston. It was an incredible ride - the company doubled in size during the year I was there - but by the Spring of this year, I was fried.
Pluralsight Halloween - Sarah is the the owl up front
I resigned in March, with the plan to stay on through June, and take the summer off to recharge. Then I met Jamie Goldstein, Pillar’s founder.
I’d given a lot of thought to what I wanted to do next, and a few things were clear. I was hungry for the sense of community I’d experienced connecting with so many entrepreneurs when I launched Intelligent.ly. I was eager to share the experience I’d gained with other entrepreneurs in the thick of scaling their own companies. I wanted to build something meaningful. Pillar checked every box.
Everything Jamie shared with me about his vision for rethinking venture resonated. I was fortunate to experience the support of so many wonderful investors - Boston Seed Capital, True Ventures, Google Ventures, Rethink - but I’d also seen some of the negative behaviors that have tarnished our industry’s brand. Jamie was taking the long view; he had surrounded himself with a world-class team of co-founding investors, and wasn’t shy about making short-term financial personal sacrifices to ensure that our entrepreneurs are aligned with the resources they need in the long run. I knew I wanted to build Pillar with him.
KC: What is your role focused on within the firm? It seems like there’s a split between making investments and leading the firm’s Access group?
Sarah hanging at Pillar HQ
SH: While I’ll be doing some investing on behalf of Pillar, my primary focus is on developing our Access group - access to leadership development, operating skills and insight our entrepreneurs need to succeed.
KC: Can you tell us more about what the Access group is at Pillar?
SH: VC has long been perceived as ‘the dark side,’ an evil empire where investors are adversaries instead of partners. We think there’s a better way. We want to change that perception, and we’re doing it by aligning our interests with entrepreneurs right from the start. From our investment terms, to support from the group of 16 CEOs who are co-founders in our firm, to the breadth of resources our Access group provides, we’re all in.
We don’t expect anyone to have all the answers. We often invest in first-time entrepreneurs and researchers, people for whom scaling a company is uncharted territory. Even experienced entrepreneurs have so much to gain from aligning with peers who can enhance their own knowledge. Our Access group plays an active role in connecting our entrepreneurs with leadership insight, mentors and advisors who will help them grow and evolve.
KC: What stage of investments do you primarily target?
SH: We invest in early-stage companies, and prefer to be the first capital in. We believe we can be the most helpful and make the most meaningful impact if we align with an entrepreneur at the ground level.
KC: What are the top traits you look for in terms of investing into a company or founder?
SH: At this stage, it’s all about people and teams. We look for entrepreneurs who can blow through walls, people who have the ability to create a swell of momentum around an idea or a technology that can transform a market. We want to build lasting relationships with our entrepreneurs; we’re not interested in partnering with jerks.
KC: What sectors of technology, industries, or trends are of interest to you?
SH: We’re particularly interested in B2B applications of machine intelligence right now - robotics, AI, machine learning, IoT, autonomous vehicles, drones, data and supporting infrastructure. With MIT and Harvard nested in our backyard, we have an unparalleled opportunity to drive the next wave of frontier technologies. We are open to making investments outside these areas, but there’s a reason why companies like GE and Amazon are expanding their presence in Boston; our ecosystem is rich with new innovation in these categories.
KC: What is the current fund that you are investing from?
SH: We’re currently investing from Pillar I, our first fund.
KC: What companies in Boston, outside of your portfolio, do you find interesting?
SH: I have a bias toward the companies Pillar’s 16 co-founding CEOs are building. There are too many to name, but it’s been incredible to see the growth of Fuze under the leadership of Steve Kokinos. PillPack is on an unbelievable trajectory. I remember meeting TJ and Elliot when the business was still in Techstars; it was clear that they are exceptional entrepreneurs, and that they were going to build something huge. I’ve also been impressed with the team at Catalant (formerly HourlyNerd). I love that they’re leveling the playing field for companies by opening up affordable access to experts. There’s a big opportunity there.
KC: Who do you admire or who has been the greatest mentor for you?
SH: Dave Balter, Mike Troiano, and Greg Woodward have all been important mentors in my life. Dave is my partner, and is a constant source of support and encouragement. He was the first person to instill confidence in me that I had the capacity to venture out on my own as an entrepreneur. Dave is relentless in his pursuit to bring big ideas to life, and inspires me with his ability to paint a vision of the future, then go out and make it happen. Mike, CMO of Actifio, has been a good friend and mentor for years. He has the unique capacity to distill complexity into simplicity. He is the person I turn to when I’m struggling with a career decision, or need a fresh perspective on how to tackle a professional challenge. I met Greg Woodward, CFO of Pluralsight, when we sold Smarterer to the company. Greg helped me navigate the transition from an early-stage startup to the management team of a $1B company, and always shared thoughtful guidance. He also taught me about the power of vulnerability as a leader. He built true loyalty among his team by creating deep personal and emotional connections with people. Greg is a good human, and taught me how to be a more sensitive and compassionate person through his own example.
KC: Outside of your day to day work, what are your personal interests or activities?
SH: I love to travel. I’m on a plane several times a month, whether it’s to catch a quick weekend in San Francisco or Florida, or to indulge in a longer trip to Italy or Amsterdam. Will travel for food and adventure. Two years ago, Dave and I rented a house in a remote village in southern Spain. We invited friends and spent the morning exploring surrounding towns, and afternoons working by the pool. I love that we live in a world where you can pick up your laptop and work from anywhere.
KC: What was the last concert that you went to?
SH: The last concert I went to was a three-day run of the Phish tour in Denver. In fact, I went to eight Phish shows this summer. Dave has seen hundreds, and introduced me to the band a few years ago. In our first year together, we saw 16 shows! There is an entire set of people I only see when we’re on the road with Phish. I can’t begin to describe the feeling that takes over when the band takes the stage, the music lights up, and everything falls into place.
KC: Are you involved in any charitable organizations?
SH: Growing up, my grandfather was an episcopal priest who devoted himself to others. He was a big supporter of Habitat for Humanity, and the non-profit has deep personal meaning for me. Several years ago, Jeff Glass introduced me to BUILD, and I had the pleasure of serving on the board for a year. BUILD uses entrepreneurship to help at-risk students remain engaged in highschool, propelling them on to college success. Before joining the board, I attended their annual event, and heard a powerful story from a brave young BUILD student entrepreneur. Her courage was astounding, and I was hooked. More recently, I’ve gotten involved with Science from Scientists, an organization Erika Angle created to bring STEM education back into our schools, by deploying real scientists into classrooms.
With the cool air beginning to sweep through the east coast, the first signs of winter are upon us. As many of my parent’s generation start to pack up their belongings and head south for the winter, so do the thousands of geese flocking to retreat from the bitter Canadian air. Being ill at home today and watching the geese from my window, I reflected on how much those geese have in common with my work teams.
Comparing geese to teams isn’t a new concept. However, when considering them based on my own dealing with my teams during my absence, I was amazed to how much they truly do have in common.
When Canadian geese fly, they form a v shaped flying pattern. One goose takes center position, with the other geese flying close behind in two lines. And just why exactly do they do this? A few reasons. Take a read, and see if your team measures up to these brilliant creatures.
THEY PARTNER TOGETHER TO HELP THEIR BUDDIES
When geese fly together, each goose provides a bit of lift and reduces air resistance to the goose flying behind it. When they fly in a v formation, the whole flock can fly about 70% farther than if they flew solo. Greater distance, faster accomplishment, and less energy expended. Who doesn’t want that?
THEY REALIZE EVERYONE NEEDS A BREAK
When one goose drops from the formation, it realizes quickly it takes a lot more energy to play catch up. It moves quickly to play catch up, and receive that lifting power from others. Whether a team member is ill, goes on vacation, or is just has an off week, sometimes people need to rely on their teams to keep the pace for them. However, most quickly realize they benefit from the comradery and energy that comes from being part of cohesive team.
THEY TAKE TURNS
Taking the lead position can expend a lot of physical and mental energy. The goose at the center spends the most energy to provide that air lift for all the following geese. As is bound to happen, when the leader needs a break, it moves to the rear of the formation, where less energy is required. Another goose takes on that leadership position, and so follows the rotation of leadership. Much as with my own team this week, when I am down, someone else steps up. Perhaps the best leader for the time is determined by strengths, or other experiences. Perhaps they are just the best leader at the time. Regardless, it’s great when your team is strong enough that everyone has the opportunity – and competence – to play both the leader and follower roles.
THEY COMMUNICATE WELL
Geese make that rather annoying honking sound as they fly for a purpose; it’s how they communicate during their long journey. Obviously, this communication is just as vital to team members as they are working together to accomplish a goal. When strong communication fails to exist, the team often falls apart.
THEY HAVE EACH OTHER’S BACKS
I will never forget driving down the highway one morning, trying to determine what the traffic jam was. It was one goose who refused to leave the side of its partner, lying dead on the highway. Apparently when one goose is injured, two other will stay behind to help protect them from predators until it is able to fly again – or until it passes on. Similar to our own teams, we aid each other when one is not at our best.
I’ve got to admit, geese are not my favorite animal. However, there is much to learn from their brilliant approach to teaming and partnership. To my own team; thank you for picking up the slack when I was down. May we all learn from those around us – even animals – who seem to have it all figured out. Sometimes, even a little better than we humans do.
Do companies like HubSpot and Demandware ring a bell? Yes, both companies went public and Demandware was recently acquired by Salesforce for $2.8B.
Have you heard of Locu and Paydiant? Both are Boston companies that were acquired over the past few years. GoDaddy acquired Locu in 2013 and PayPal acquired Paydiant in 2015.
How about the next wave of companies like Drift, NewStore, and Semantic Machines?
These are all companies that Larry has invested in and it isn't even the full list. Needless to say, his track record speaks for itself.
Keith Cline: Tell us about your background.
Larry Bohn: I grew up in a suburb of Boston (Milton), went to public schools. My dad died when I was 17; he was a decorated airman in WWII. He was shot down over Romania and spent 18 months in a POW camp. When he returned, he ran a lunchonette in my uncle’s drug store. My mom was a bookkeeper and after my dad died, she worked full time to support three kids. She later became a travel agent. The main thing I learned from this was that life is full of unpredictable challenges; you need to work hard and become independent, and your determination and resiliency is how you develop character.
KC: Per your bio on the General Catalyst website, it looks like you’ve had some interesting jobs before college (delivered groceries, drove a taxi, worked on a farm, was a short-order cook, and managed a pool hall). Did you learn anything from these jobs that set down a foundation for later success?
LB: I learned early that working with people of all types, learning to listen, being able to manage conflict, and providing excellent service goes a long way to being successful. I really enjoyed all the jobs I had (except for picking corn, which sucked). It gave me confidence in my ability to make money, to be independent, and to learn important lessons from many types of people.
KC: What prompted you to study English at UMass Amherst for your undergraduate degree and then, complete your Masters in English Linguistics at Clark University?
LB: I entered college at a time of great volatility; Vietnam War, social division, etc. I was fortunate to be able to go to college on the GI bill as a "war orphan" as it was determined that my dad's death related to his war injuries. I didn't really have a career goal other than a vague sense of wanting to be a teacher or professor. Everyone who studied business at the time was a dunce. I liked English for the intellectual challenge and I was a good writer. I was lucky enough to get a teaching fellowship at Clark University where I taught expository writing. It was great experience but I learned that if I wanted to be a college professor, I would need a PhD and I didn't have the stomach for it. So I got a job teaching writing and English at a junior college in Boston. After a year, I realized I was really capped in my career and wanted something different. I had two real skills; I was a talented writer and I had a knack for technical things. I had taken one Fortran programming course. So at the time, I was actually qualified to get a job in the nascent computer business.
KC: Was your first job your of college at Data General?
LB: I landed a job as a software technical writer at Data General where I wrote manuals on how to operate and program 8 and 16 bit computers. My first masterpiece was called "How to Load and Generate your RDOS System"; it was a bit hit! Later, I became fascinated with computer programming and taught myself assembly language programming and a whole range of database technologies. This gave me a strong technical background to move on to technical and management roles at Digital and later Apollo computer, where I developed a software system for document retrieval and became sort of an expert in docoument production systems.
KC: Tell us about the rest of your career before getting into venture capital.
LB: While at Apollo I learned about a Cambridge software startup called Interleaf which was an MIT based company doing WYSIWYG document production software. I sort of fell in love with the product and later was recruited to be the VP Products and Marketing at the company. It was a terrific fit because I was very much the "voice of the customer" and was able to lead the product team to become the leader in the space. It was an amazing ride, from a small team to a sizeable public company and it forever gave me the startup itch.
This was at the very beginning of things that created the web, like XML, the rise of PCs, networks, etc. I ran almost all the different functions at different times at Interleaf and it gave me the confidence and desire to want to run my own company. I got recruited to become President of a startup in the document management space, PC Docs, which was headquartered in Tallahassee Florida and was owned by a Canadian company. My job was to move the company to Boston where there was better talent and to grow the company. Most of the employees in Tallahassee where students at FSU, and I was able to convince them to move to Boston in February!
The company hit a great vein of opportunity, riding the growth of PC networks, Microsoft SQL, etc. We catapulted to the #1 position in the market and after the second year we did a US public offering. It was an amazing and exhausting experience, and two years later another Canadian company, Hummingbird, acquired the company.
I was fortunate at the time to be able to take 10 months off and look for my next opportunity. During that time I met with a number of startups and I was very focused on finding an emerging internet application company. By chance, I was introduced to a very small MIT startup called NetGenesis which had a web analytics product. There were about a dozen people in the company but I really liked the two founders, Matt Cutler and Eric Richards. They had the beginnings of an interesting product but really lacked the go-to-market skills. Over a couple years, we worked hard to become the leader in the enterprise space, took the company public in 2001, and had a billion dollar market cap for about a month before the market crashed. The next 18 months of running the company were really tough; we retrenched, had layoffs, but were fortunate to sell the company to SPSS software in 2002 in what was a horrific M&A market. Again, I took some time off, was pretty burned out, but got a call from an old friend, David Orfao who was just starting a new venture firm in Boston and was looking for some help.
KC: How you did you get into venture capital and join General Catalyst?
LB: As a CEO, I had worked with venture folks and had flirted with the idea of changing roles. After selling NetGenesis I was looking for a change and joined General Catalst (GC) as a Venture Partner which is a good transition role. GC was just getting started; I really loved the startup nature of the firm and the motto of "entrepreneurs investing in entrepreneurs." Very soon, I made a couple of investments and my first one, Venetica, got sold to IBM after 14 months and I said "wow, this is easy"; what a false positive!
KC: How has venture capital changed or evolved over the almost seventeen years you’ve spent as an investor?
LB: I think the biggest change is that because of a number of technologic innovations (cloud computing, SaaS, mobile, etc) companies can get started and grow initially on much less capital, so venture tends to see companies that are already formed and starting to scale. When I first was in the business it took several million dollars just to get started. So the advent of seed funds, incubators, etc., has been a good thing overall and we get to see companies at the next stage of scaling. I also think the business has become increasingly specialized as the most successful venture investors have deep knowledge of certain areas and can be more helpful to startups as they understand their challenges and opportunities. For example, I focus on enterprise and B2B software and while I have lots of opinions on the consumer side, I know that my focus on commerce, SaaS, and analytics, gives me an advantage to source deals and benefit companies I invest in.
KC: How about Boston, how has the ecosystem evolved since then?
LB: I think Boston is a terrific environment for startups and technology but we have to realize that we are not the center of gravity. Silicon Valley and SF are clearly the leaders here. Boston has great strengths in software (SaaS, analytics, mobile, commerce, etc) and certainly the biotech sector is premier. But some areas like internet infrastructure are more challenged and we are weaker in consumer technologies. This has resulted from not having enough big internet companies where the most advanced technologies are being developed and brought to market and where teams spin out to create the next great thing. I don't obsess or fret about this. Boston has great universities, superb talent, and a long term startup and innovation culture. So while today we may feel a bit underappreciated, I see companies like HubSpot, KAYAK, Demandware, etc. spinning out startups that will become terrific companies in the future.
KC: What stage of investments do you primarily target?
LB: I have been almost exclusively a Series A investor, which means I back founders and teams very early. It's only now that I contemplate doing things slightly later stage, like Series B or C.
KC: What are the top traits you look for in terms of investing into a company or founder?
LB: I have a pretty simple rubric for a founder:
Has great domain expertise and has "over the horizon radar" in the space they are persuing.
Is personally magnetic and can recruit and build a terrific team.
Is relentless in their pursuit of building something significant.
Is resilient and can recover from hardship and failure.
Is team oriented, and wants to build something lasting and bigger than themselves.
KC: What sectors of technology, industries, or trends are of interest to you?
LB: I am very focused on SaaS, including commerce, marketing and sales technologies, and the range of analytic applications. I tend to be "up the stack" in terms of where I focus. I'm also very interested in various AI applications both fully automated and human assisted. And I try to ground my investment focus on areas where I believe we can make money.
KC: What is the current fund that you are investing from?
LB: We are currently investing out of GC 8, which is an $850M fund that is both early stage and transformational growth.
KC: You are a very active investor in Boston companies such as Drift, NewStore, Semantic Machines, and several others. What excites you about the current market in Boston?
LB: As I mentioned, Boston has great entrepreneurs and innovation areas. I think we are especially blessed with deeper software technologies like AI, and application areas that are ripe for disruption. The amazing ecosystem in healthcare also gives us fertile soil for healthcare IT/data/etc. And there's every kind of oddball inventing the next great mobile game, cloud app, or mobile widgit.
KC: A lot of your previous investments have been successful leading to an exit, recent examples include HubSpot, Demandware, Locu, Paydiant, etc. Looking back, are there any common traits about these companies that led them to a successful acquisition?
LB: These companies were led by great founders and entrepreneurs who had the characteristics I mentioned earlier. And they have been blessed by both timing and luck.
KC: What companies in Boston, outside of your portfolio, do you find interesting?
LB: I am a big fan of Wayfair (I buy stuff from them), DataXu (amazing ad tech platform) and Rocket Software (the $500M revenue company no one has ever heard of).
KC: Greatest misses - what companies have you passed on that you wish you hadn’t?
KC: Who do you admire or who has been the greatest mentor for you?
LB: Really so many people. My grad school advisor, Dr. James Macris, was someone who had a rare mix of intellectual curiosity and hard knuckle practicality. And he believed in me.
KC: Outside of being a VC, what are you personal interests or activities?
LB: I am an avid cyclist, being an 18 year rider in the Pan-Mass Challenge. I am an occasional woodworker and I like to read a lot.
KC: What type of music do you like? What was the last concert that you went to? OR… what was the last book that you read or movie that you saw?
LB: I tend to be trapped in music of the 70s/80s. Last two concerts were the ABBA reunion and Bruce Springsteen. The last book I read was “Truck Full of Money” which was just released and profiles by good buddy, Paul English.
KC: Are you involved in any charitable organizations?
LB: Through the PMC, I am a big supporter of Dana Farber. My wife works with and we are supporters of Facing History. We are founding members of the Arlington Education Fund. Also, I consider some of what I do as a VC to be a form of charitable giving:)
Like many Americans, I watched the presidential debate this week like I was watching a movie from the Saw franchise: I knew it was going to scare the hell out of me, but I sat back in stunned horror nonetheless.
It was a difficult thing to explain to my teenage daughters why these two adults were intent on sabotaging each other and eager to attack the other’s point of view in such a harsh manner. I did my best to explain that, despite the nastiness of the debate, something beautiful did exist. Put simply, I shared that the notion that these two people could speak their minds and beliefs freely, leaving us – the citizens - to determine the best choice to lead.
To embrace the freedom our country was founded on is a great responsibility each of us over the age of 18 has the right to possess. So regardless of my political leanings, I feel it my personal responsibility to vote. And I can’t understand why anyone would choose not to.
Conversely, workplaces are not run by a democracy, though most organizations are savvy enough to solicit feedback and opinions from their trusted team members. Do you know how to find your voice and speak up? Do you find yourself concerned about offending someone with your ideas? Maybe looking silly because you don’t have full information? Of course, sometimes it makes sense to bite your tongue.
Despite your fear, here are four reasons why you should let your voice be heard at work.
SILENCE EQUALS ACCEPTANCE
Maybe you are staying quiet to avoid conflict, but it could actually have the opposite effect.
When a topic is shared and you do not say anything, you risk being seen as enabling. If you have a concern and fail to voice it, you are just as culpable as the person who caused the problem in the first place. To not share your voice may destroy trust - and you will rarely find someone who is grateful that you withheld your opinion in the future.
FOCUS ON THE GREATER GOOD
Of course, most people never want to be perceived as “the bad guy.” Maybe you worry that by sharing your thoughts, you risk appearing overly critical.
However, if you feel an individual or team is headed down a bad path, it’s selfish to put your own feelings of comfort or safety before the needs of others. The worst case scenario is that someone might disagree with you. The best case? The team might truly benefit from your insights.
SHOW YOU ARE ENGAGED
If you are involved in a conversation, actually be in the conversation. Why bother to participate if you don’t truly wish to engage?
To do that, become impactful by sharing your voice. Doing so in a productive manner is a trust-builder, especially when it’s partnered with tact and empathy. When you share your ideas this way, you build trust and a healthy reputation for giving good advice. Who doesn’t want to partner with team members like that?
BE COURAGEOUS
You might be the first to speak, but chances are if you are thinking about something, it might have occurred to others as well. Once you have the courage to share your ideas, you might just find you’ve made it safer for others to speak up as well. While this might put you in an uncomfortable place momentarily, it’s unlikely any company will not support the voice. Companies thrive on new perspectives and fresh ideas. Staying quiet doesn’t benefit anyone.
Next month, we head off to the polls to elect our next Commander-in-Chief. While workplaces are quite different than how we run our country, we still get a voice. To build your own career and strengthen your own thinking, be courageous and share your thoughts and ideas. You might just add some significant value.
These Dot-Com Companies From CMGi Were Precursors For Many of Today's Successful Web Products
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Yesterday, we took a look at the history of CMGi, an incubator and venture capital firm from the dot-com era. The company was based in Andover, Massachusetts. It had a historic rise and a rapid fall, as the internet bubble burst in 2000.
During the mid to late '90s, the internet was the wild west, as lots of companies were being built to leverage this new form of technology. Regardless of the financial outcome of the companies being built over this time period, they were still groundbreaking and ultimately laid down the foundation for what the internet is today.
We decided to take a look at CMGi's portfolio in Boston (operatings companies and investments) from the dot-com era and translate these companies into the web products of today.
Below are the details in a slideswhow. We gathered the images from the Internet Archive Wayback Machine. We apologize that some of the images unded up being incomplete, but at least it gives you a glimpse as to what the homepages looked like for each company.
AltaVista, a CMGi Operating Company was established in 1995 and CMGi purchased 80% of the company in 1999.
Mission: AltaVista unlocks the boundless potential of the Internet, giving users the most immediate and intelligent access to Internet resources by empowering people with knowledge to succeed in life!
Today's Translation: AltaVista was one of the world's first search engines, so it was the Google of its time. It also had a portal strategy competing against Yahoo! and Aol.
AltaVista, a CMGi Operating Company was established in 1995 and CMGi purchased 80% of the company in 1999.
Mission: AltaVista unlocks the boundless potential of the Internet, giving users the most immediate and intelligent access to Internet resources by empowering people with knowledge to succeed in life!
Today's Translation: AltaVista was one of the world's first search engines, so it was the Google of its time. It also had a portal strategy competing against Yahoo! and Aol.
Domania.com, a CMGi @Ventures investment, was founded in 1989 as INPHO, Inc. The company was headquartered in Boston.
Mission:Domania.com is dedicated to empowering consumers by providing them with greater access to valuable and hard-to-find home price data and the tools with which to best utilize this information.
Domania.com, a CMGi @Ventures investment, was founded in 1989 as INPHO, Inc. The company was headquartered in Boston.
Mission:Domania.com is dedicated to empowering consumers by providing them with greater access to valuable and hard-to-find home price data and the tools with which to best utilize this information.
iCast, a CMGi operating company, was founded in 1999. The company was headquartered in Woburn.
Mission: iCast's mission is to become a major online entertainment content distribution platform. A premier destination where members can create, share & personalize their entertainment experience, as well as discover & interact around a wide variety of original, third-party & member-generated multimedia content.
Today's Translation: Spotify meets iTunes meets YouTube meets iHeartRadio. iCast was a comprehensive digital entertainment platform which was ahead of its time.
It offered music streaming, online radio, and movie previews. It allowed up & coming artists the ability to upload their own music. You could also send in video to iCast, so it could be encoded and made available online.
iCast, a CMGi operating company, was founded in 1999. The company was headquartered in Woburn.
Mission: iCast's mission is to become a major online entertainment content distribution platform. A premier destination where members can create, share & personalize their entertainment experience, as well as discover & interact around a wide variety of original, third-party & member-generated multimedia content.
Today's Translation: Spotify meets iTunes meets YouTube meets iHeartRadio. iCast was a comprehensive digital entertainment platform which was ahead of its time.
It offered music streaming, online radio, and movie previews. It allowed up & coming artists the ability to upload their own music. You could also send in video to iCast, so it could be encoded and made available online.
Engage, a CMGi Operating Company, was founded in 1995 and grew to over 1,000 employees. The company was headquartered in Andover.
Mission: Engage is the only online marketing company to combine optimized media solutions, actionable analytics and enabling technologies with the expertise and insight marketers need to achieve superior results.
Today's Translation: This is a problem still being solved today from large and small companies like Google, IBM, Oracle, Evergage, Optimizely, and many others.
Engage, a CMGi Operating Company, was founded in 1995 and grew to over 1,000 employees. The company was headquartered in Andover.
Mission: Engage is the only online marketing company to combine optimized media solutions, actionable analytics and enabling technologies with the expertise and insight marketers need to achieve superior results.
Today's Translation: This is a problem still being solved today from large and small companies like Google, IBM, Oracle, Evergage, Optimizely, and many others.
NaviSite, a CMGi operating company, was founded in 1996 with headquarters in Andover. The company still exists today and was acquired by Time Warner Cable back in 2011, which later merged with Charter Communications.
Mission: To provide customers with 24X7 support required by online businesses and proactively monitored applications fine-tuned to ensure top performance.
NaviSite, a CMGi operating company, was founded in 1996 with headquarters in Andover. The company still exists today and was acquired by Time Warner Cable back in 2011, which later merged with Charter Communications.
Mission: To provide customers with 24X7 support required by online businesses and proactively monitored applications fine-tuned to ensure top performance.
Lycos, a CMGi @Ventures investment, was established in 1995. Its headquarters were based in Waltham.
Mission: To become the most visited online destination in the world, and an admired business, by winning people's time with the best interactive products and a customer focus that is second to none.
Today's Translation: Web portals were a big thing back in the dot-com era and Lycos was one of the biggest. The company went on to be the fastest IPO in NASDAQ history.
Side note - You can read more about the background story of Lycos by reading our Investor Profile on Bob Davis, who was CEO at Lycos and is currently a General Partner at Highland Capital Partners.
Lycos, a CMGi @Ventures investment, was established in 1995. Its headquarters were based in Waltham.
Mission: To become the most visited online destination in the world, and an admired business, by winning people's time with the best interactive products and a customer focus that is second to none.
Today's Translation: Web portals were a big thing back in the dot-com era and Lycos was one of the biggest. The company went on to be the fastest IPO in NASDAQ history.
Side note - You can read more about the background story of Lycos by reading our Investor Profile on Bob Davis, who was CEO at Lycos and is currently a General Partner at Highland Capital Partners.
Furniture.com, a CMGi @Ventures investment, was established in 1998. The company's headquarters were based in Framingham.
Mission: To revolutionize the home furnishing and decorating experience by offering a comprehensive, personalized and service-oriented solution for consumers.
Today's Translation: Wayfair.
Side note - the domain Furniture.com is owned and operated by Blueport Commerce in Boston.
Furniture.com, a CMGi @Ventures investment, was established in 1998. The company's headquarters were based in Framingham.
Mission: To revolutionize the home furnishing and decorating experience by offering a comprehensive, personalized and service-oriented solution for consumers.
Today's Translation: Wayfair.
Side note - the domain Furniture.com is owned and operated by Blueport Commerce in Boston.
ThingWorld, a CMGi @Ventures Investment, was established in 1996. The company's headquarters were based in Watertown.
Mission: Digital Entertainment Solutions for Leading Brands. ThingWorld.com develops world-class multimedia technologies that expand online businesses by enabling sports, entertainment and media companies to control, leverage and distribute their digital media assets .
Today's Translation: Growth hacking. ThingWorld.com was an early version of leveraging viral marketing techniques to build awareness for content or products online.
ThingWorld, a CMGi @Ventures Investment, was established in 1996. The company's headquarters were based in Watertown.
Mission: Digital Entertainment Solutions for Leading Brands. ThingWorld.com develops world-class multimedia technologies that expand online businesses by enabling sports, entertainment and media companies to control, leverage and distribute their digital media assets .
Today's Translation: Growth hacking. ThingWorld.com was an early version of leveraging viral marketing techniques to build awareness for content or products online.
TVisions, a CMGi @Ventures investment, was established in 1994. Its headquarters were based in Watertown.
Mission: Tvisions is a premium Internet professional services firm that plans, designs, and implements strategic e-business solutions for clients seeking market leadership. Tvisions provides thought leadership and technological innovation to help transform business.
Today's Translation: Tvisions eventually rebranded to Molecular and was acquired by Isobar in 2005.
Side note - the company's founder & CEO was Ralph Folz, who is now the CEO at WordStream.
TVisions, a CMGi @Ventures investment, was established in 1994. Its headquarters were based in Watertown.
Mission: Tvisions is a premium Internet professional services firm that plans, designs, and implements strategic e-business solutions for clients seeking market leadership. Tvisions provides thought leadership and technological innovation to help transform business.
Today's Translation: Tvisions eventually rebranded to Molecular and was acquired by Isobar in 2005.
Side note - the company's founder & CEO was Ralph Folz, who is now the CEO at WordStream.
OneCore, a CMGi @Ventures investment, was established in 1998. Its headquarters were based in Bedford, MA.
Mission: OneCore.com is a unique online financial service, custom-built for small businesses & entrepreneurs, to help them manage their finances quickly & efficiently.
OneCore, a CMGi @Ventures investment, was established in 1998. Its headquarters were based in Bedford, MA.
Mission: OneCore.com is a unique online financial service, custom-built for small businesses & entrepreneurs, to help them manage their finances quickly & efficiently.
MyWay.com, a CMGI operating company, was established in 1996. The company's headquarters was in Andover.
Mission: MyWay enables our business partners worldwide to deliver content and applications to their customers anytime, anywhere on any device, in a compelling relevant, distinctly local, private-label, personalizable and customizable fashion.
Today's Translation: MyWay, was originally Planet Direct, which sold portal services to smaller internet service providers. They also had a strategy to make it a standalone consumer web portal. I'm not sure there is a current white label portal company these days.
MyWay.com, a CMGI operating company, was established in 1996. The company's headquarters was in Andover.
Mission: MyWay enables our business partners worldwide to deliver content and applications to their customers anytime, anywhere on any device, in a compelling relevant, distinctly local, private-label, personalizable and customizable fashion.
Today's Translation: MyWay, was originally Planet Direct, which sold portal services to smaller internet service providers. They also had a strategy to make it a standalone consumer web portal. I'm not sure there is a current white label portal company these days.
Google, now Alphabet, started out as a search engine and is today a multinational conglomerate with a market cap of over $500B. The company has expanded well beyond the original core search engine business and now owns multiple products and divisions like YouTube, Google Maps, Chrome, Android, and new hardware products. GV (formerly Google Ventures) is the organization’s venture arm and has made investments in companies like Uber, Slack, HubSpot, 23andme, and many others.
Back during the 90s dot-com era, there was a Boston-based company that was like an earlier version of what Google is today. It was an early adopter that pushed the limits of the internet, which at the time was the new frontier. This company played a major part in laying down the foundation for what the internet is today.
The company was revolutionary. It had a powerful search engine, many different innovative products, Eric Schmidt’s attention, and a venture arm.
Yes, this is the same company that had the original naming rights to the home of the New England Patriots, which at first was known as CMGi Field.
Unfortunately, along with the entire industry, the company had a rapid rise and then a massive collapse and became the poster child for the dot-com era.
Regardless of the stigma placed on the company, it is interesting to look back at all the innovative companies and products CMGi built or invested in. At its peak, the company had over 70 investments, 20 subsidiaries, 5K employees, and $1.5B in annual revenue. Its market cap was $41B and ranked somewhere around No. 7 - 9 in the world in terms of aggregate traffic to all of its properties.
I’m fascinated by the history of Boston tech, so I decided to take a dive into the company’s history by interviewing David Wetherell, who was the Chairman and CEO of CMGi.
The History of CMGi
The company was originally known as CMG Information Systems before the name was shortened to CMGi. Wetherell became Chairman, CEO, and President after a leveraged buyout of the company in 1986. CMGi’s core business was focused on selling mailing lists of university faculty and information buyers to educational and professional publishers. After taking over, Wetherell built up the company’s revenue and market share, and the company went public in 1994. Shortly after its IPO, Wetherell founded BookLink Technologies, a web browser company, which was sold to America Online for an all-stock transaction that yielded $72M for CMGi from an initial $900K investment.
BusinessWeek Cover Photo From 1999
The proceeds from the sale of BookLink allowed CMGi to focus on a two-pronged strategy. It would incubate its own startup internet companies and also have an investment arm, CMG @Ventures, to fund other early stage internet companies. As the business and its portfolio grew, CMGi became a NASDAQ 100 company and market leaders like Microsoft, Intel, and Sumitomo held minority positions in it.
CMGi’s portfolio included companies like AltaVista, Engage, Lycos, GeoCities, Raging Bull, NaviSite, Furniture.com, MotherNature.com, MyWay.com, Snapfish, Yesmail, and many others. (We’ll have a slideshow on VentureFizz tomorrow digging deeper into the portfolio and how these companies were precursors to many of today’s major web products.)
In 2000, CMGi was working with Eric Schmidt, then-CEO at Novell along with Sun Microsystems and Compaq on a new initiative called CMGion. Each partner agreed to invest $20M and build a unified, global, internet-based network service, which ultimately would have been a competitor to Akamai and other Content Delivery Networks if the market didn’t collapse.
The venture arm made some great investments, but like most firms, there were ones that got away. For example, CMG @Ventures had the opportunity to invest in the first round of capital for eBay, but they couldn’t come to terms. eBay was profitable already, so it was looking for a pretty lofty valuation, which ended up being a small price to pay as compared to the ultimate value of the company.
According to Wetherell, Novell and CMGi were planning a merger and Eric Schmidt would have been CEO of the combined entity but the merger was put on hold when the market crashed during the spring of 2000. He also mentioned at one point CMGi discussed acquiring Google, but the board was against the idea.
AltaVista
One of CMGi’s major portfolio companies was AltaVista, one of the first major internet search engines. AltaVista was developed by researchers at Digital Equipment Corporation (DEC), and it was the Google of its time. In 1999, CMGi purchased 80 percent of the company from Compaq, which had acquired DEC, and transformed it into a web portal company to compete against Yahoo! and others.
AltaVista Logo in 1999
AltaVista was set up to go public in 2000 right when the stock market crashed for tech companies, leading to the ‘internet bubble burst’, and CMGi was forced to delay the IPO. Even after the bubble had burst, AltaVista still had value and Wetherell believed that it could have enabled CMGi to remain a significant player in the internet space. After cutting costs, AltaVista still had $50M in revenue and was break-even. Even more valuable was the fact that AltaVista owned 50-60 key search engine patents, which Wetherell believed was worth more than what CMGi paid for the asset.
Google had serious momentum at this point and was quickly becoming the search engine behemoth that it is today. Despite challenges in the marketplace competing with Google, Wetherell argued to the board that the company should retain AltaVista because of the value of its patent portfolio, which would later yield value from Google in return for freedom to operate once it was ready to go public. The BOD was not convinced, and AltaVista was ultimately sold to Overture Services (later acquired by Yahoo!). It is believed that Yahoo! received in the vicinity of five percent of Google in exchange for the freedom to operate, which today is worth in excess of $25B.
The Fall
The dot-com bubble’s burst could have been avoided was it not for the Y2K / new millennium bug and a confluence of other factors, according to Wetherell. There was a great deal of fear and anxiety surrounding the Y2K bug which might have caused computers to crash and perhaps a run on banks. To counter this fear, the Federal Reserve Bank flooded banks with $60B of liquidity to make sure the banks had enough cash to keep operating in the event of such a run.
Once the turn of the century occurred, and there was no run on the banks, the Fed feared that the extra liquidity would prove to be inflationary, despite the fact there were no signs of inflation. To counter this inflationary concern, the Fed raised interest rates six times in six months. This, in turn, caused the IPO market to shut off, leading to the market crash, and venture capital, the lifeline of early stage internet companies, dried up. It ended up being a perfect storm of events which maybe didn't need to happen at all and could have saved the industry from such an abrupt downward turn.
It was a tough time for CMGi and the rest of the tech industry. There were a lot of tough decisions. Companies folded, people lost jobs, and investments lost value. Quickly, $20B in CMGi’s public market portfolio lost value.
Surprisingly, CMGi did survive the dot-com collapse, as they focused on a core of six internet companies, including AltaVista. Then, with the attacks of 9/11, the stock market crashed again, which put additional pressure on the company. The BOD made the decision to jettison its internet businesses, the last of which was AltaVista.
So, what is Wetherell up to now? After retiring from CMGi, Wetherell took his background in the high tech industry and applied it to something that had more meaning for him: life sciences. He started out as a sole angel investor, and it blossomed into an investment firm with $200M under management, called Biomark Capital. The firm has invested in a dozen leading edge Biotech and healthcare companies, and he finds the firm’s work extremely gratifying.
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