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Hey, everyone. It’s Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart. You, guys, know we do here every weekday. I bring a new entrepreneur on who’s built a successful business to come and talk about how he built that business, what he’d learned along the way. And more importantly, to help my audience go out there and build their incredible businesses so, at some point, in the future, I can interview them.
Today, to help learn, help show us how he built his business, I invited Rikard Kjellberg who founded Ellipsus Systems back in 1999 and sold this company three years later to Openwave Systems. Today, he’s the co-founder of IngBoo which aims to bring blogs, news, and deals to Web users in a clutter-free place. My goal with this interview is to find out how he launched and grew Ellipsus and also to find out what he’s done with this current company with IngBoo. Rikard, welcome to Mixergy.
Interviewee: Thank you very much, Andrew.
Andrew: So, let’s start with Ellipsus. What was that company?
Interviewee: Ellipsus was a mobile Internet startup in 1999, and we started in Stockholm, Sweden which was really kind of the hub for mobile at the time. Obviously, a lot of the things that we thought we’re going to happen are happening now, 10-11 years later. But, it was exciting times, and so we ended up building one of the first mobile apps stores for deployment with wireless service providers.
Andrew: So, wait, actually, it looks like the live audience is telling me that they can’t watch us. I’m going to hit a button for them. We’re dealing with a few technical issues today but I think we’ve got most of them solved by now. So, what was in the apps store back then?
Interviewee: Well, back then, actually, a mobile apps store was actually a combination of things. Especially, in Europe, you would actually go to a physical store, buy a magazine, open up the centerfold, and see a bunch of short codes. Punch in one short code, and before you knew it, you’ll get a free SMS with the ringtone. Today, it’s obvious that you use your browser or some shopping client on you phone, etc. But we actually worked with Siemens and Sony Ericsson and other mobile providers or manufacturers to integrate browsers with the content environment. It could be a Java execution environment or the ringtone manager or whatever in the phone so that we could create a shopping experience on the phone, actually. This was groundbreaking in 1999.
Unfortunately, in Europe, the model remained kind of, you know, buy a ringtone with an SMS. So, we found our market in the US, actually, and did the Delaware Corporation and set up an office in Dallas, Texas because our CEO that we recruited lived there. Before we knew it, we were working with one of the larger wireless service providers, Sprint.
Andrew: Let’s take this step by step to understand it. So, before you got in this business, people were actually going to centerfolds in magazine, not to see women, but to see short codes, typing those short codes into their phones, then they’d get that app delivered to their phone remotely. People actually did this?”
“minute 5 to minute 10
Andrew: …typing those short codes into their phones, then they’d get that app delivered to their phone remotely. People actually did this?
Interviewee: Yes. It sounds like it’s ages ago, but it’s actually about ten years ago. So, yes, that’s how it was done.
Andrew: What kind of apps did they get at the time?
Interviewee: It would just ringtones. Started with monophonic ringtones, you know, (makes some sounds) and then polyphonic was the big thing. Yes, and then, of course, with Sun Microsystems, starting to work really hard on Java 2 Micro Edition (J2ME), it became more and more interesting to be able to download applications to your phone. Actually, the fact that Sun was working on this in parallel with our efforts, created a fantastic opportunity for us. We ended up partnering with Sun, actually.
Andrew: So you see this, what’s the vision for the business that you have? What do you envision launching?
Interviewee: At the time, we were envisioning launching an Internet experience for mobile phones that was truly mobile, wireless, consumer-friendly if you want, and turn the phone into marketplace. That’s really what we wanted to do.
Andrew: A marketplace for what? What were you thinking people would buy?
Interviewee: Anything that you could consume on the phone. It’s funny you mention this because some of the conversations we had with unnamed characters, they thought that we were kind of looking at it as a vending machine for physical goods. But we were very much focused on anything that could be consumed on the device. So, ringtone, obviously, wallpaper – change the background on the phone – and then, obviously, games; and, later on, video, etc. So, that was the idea, and we thought that those things have value, and people would be willing to pay for it because a phone is a very individual, personal device. If I can make it more personal, I will, and I’ll pay for it. I think, the ringtone market in Europe proved that that was indeed the case, and we thought you could replicate that with other content like Java games, for example.
Andrew: How would you get your store, your marketplace on to people’s phones? What did you imagine you’ll do?
Interviewee: What we ended up doing was focusing on the wireless service providers. Initially, I think, that was the right strategy. But as soon as these apps stores were getting deployed with the wireless service providers, you start to realize that they are not really good at merchandising goods. So, later, between 2000 and 2005, you saw the emergence of services like Motricity is an example. They’re running a lot of mobile content stores for in-service providers today, AT&T being one, I believe. So, it was better for the service provider to actually partner with someone who understood marketing and content merchandising, recommendations, etc. and can run it as a business. It kind of morphed into revenue share model instead. But we were actually deploying a product, which was the platform on which you would build your branded mobile apps store, basically. But the business model would have been better if we had offered it as a service.
Andrew: How do you mean? What’s the difference between offering the platform and offering the service?
Interviewee: One thing you have also to think about here is we got acquired by Openwave Systems, and Openwave Systems is in the products business, infrastructure business. So, in that business, you would build a product which you would deploy servers, that you may or may not own. But then you would sell that product to customers who would own it and manage it themselves, and do whatever they want to do with it themselves. That is very different from striking a deal with the service providers saying, “Hey, we can provide this value-added service to your customers, the end users, and you don’t really have to pay anything upfront for this. But, as we sell goods to your customers, we’re going to make money and we’re going to share that with you. So we’ll write you a check.” That’s the difference. So, instead, you would, basically, operate the whole thing and there’s only one product, which is what you’re running, and you have branded experiences with your partners, the service providers.
Andrew: Why is it better the other way? Why is it better to just hand it over to them and just sell them, I guess, a license?”
“Andrew: and to sell them, I guess, a license?
Interviewee: Well, I mean, in this case, with mobile app stores. It is not better. It is better to run it as a service because your customer partner here, let’s say a Sprint or a Verizon or an ATT, will actually end up making more money if they partner with a company that is really focused on the whole, having the store online, merchandising goods, promoting new content, making sure that there’s relevant content tied to current events available etcetera right? So, that drives revenue. And more so than…I mean, some software should be sold as products. You know, mobile access gateways, sure. Messaging gateways, like in (audio blanked out?) But this is an end-user focused service and partnering would be better and, as it turns out, that’s how it’s done today mostly.
Andrew: I see, okay, I misunderstood. I thought you did partner with them and you’re saying that’s how we should have done it.
Interviewee: That’s how we should have done it. We licensed the product to them.
Andrew: What in your background led to this? I was looking at your LinkedIn profile and saw Swedish Space Corporation, you were software manager there. You were CTO of Saab Transporter Tech. What about your background said “I love ringtones? I’m going to get into the wallpaper of cell phone business.”
Interviewee: Yeah. Well, sometimes I call myself a rocket scientist, having worked at the Swedish Space Corporation. And indeed, we did build rockets and satellites there. However, I was part of a small group who was developing a mobile wireless location solution for the aviation and maritime industries based on an invention by a Swedish inventor by the name Håkan Lans. Håkan Lans was actually credited to be the inventor of color graphics. He has the patent for that and has been in litigations for years and years with a lot of the developers of the color graphics screens etcetera and the boards. But he invented a communications scheme that was completely autonomous and allowed two vehicles, if you want, or two mobile units to communicate with each other in exchanging information without need for any base stations. So it works really well anywhere on planet Earth. So I spent almost five years working on this solution. So came the emergence of mobile technology through this effort and, of course, in parallel working closely with a lot of Swedish industry. You know we got Erikkson right next door. You have Nokia across the pond. And a lot of mobile technology was starting to integrate GPS which was what we were basing our solution on in a lot of cases. So I started getting interested in more consumer-oriented applications for mobile technology actually. The thing that really intrigued me wasn’t so much building the mobile app store as “Hey, I want to download really cool apps to my phone and turn them into things other than just making a call on.” You can download an app that can make use of the technology on the phone and you can turn it into a gaming device or a way to exchange positions with your friends. I mean the possibilities were infinite.
Andrew: So a lot of what we are seeing today with the iPhone and the Android, that’s what you were envisioning even back then?
Interviewee: Yes. In fact, we were envisioning exactly that. Then, there was a time when I didn’t believe in downloadable apps. And actually, that belief stuck with me until the day that Apple opened up the iPhone for developers. And then I came back and said, “You know what, this is here to stay now.” Because it wasn’t really happening. It wasn’t really taking off. Sun wasn’t truly successful with Job on the phone. Callcom was trying something called BREW…Binary Runtime Environment for Wireless. BREW and Job, they were all competing. I think it was a kind of gimmick but it wasn’t really taking off. But, of course, what they all failed to realize was that you have to have the right device. And I think Apple cracked that nut basically.
Andrew: And, the ease of use…I used to have a Trio for a long time and I would add incredible apps to that thing.”
“minute 15 to minute 20
Andrew: And the ease of use. I used to have a Treo for a long time, and I would add incredible apps to that thing. The thing is that if you try to teach someone else how to add an app to it or even how to add music to the Treo, you get lost and frustrated just trying to teach them, let alone leave it to them to try to figure out how to do all that for themselves, they never would. I would see my friends carrying around these Treos, and I knew how powerful the Treo was. I would connect it to my computer and use the Internet off of my Treo through tethering. I would do all kinds of great stuff with it. I would watch movies on it, and I would watch my friends do nothing but make phone calls and text because it had the keyboard, and I get so frustrated.
Interviewee: You belong to an exclusive group called the early adaptor.
Andrew: Called the nerds, the big freaking nerds.
Interviewee: Yes. But, early adaptor is a good term. I think iPhone made the smart phone a mainstream device, that’s the big difference here, made it accessible.
Andrew: The other thing that is not screaming out of your background is entrepreneur. Were you entrepreneurial before launching this business?
Interviewee: I started my first little business when I was 17. Now, I’m going to confess how old I am, but when I was 17, basically, that’s the era of the IBM-PC. I was obviously living in Sweden at the time and there was, literally, no one who understood the PC platform. I just learned a lot about software at the time, and I was also kind of a self-taught programmer, if you want. There were a lot of issues around the PC connecting it to printers that didn’t work or connecting it with different peripherals that needed a driver and so forth, etc.
So, I really started, at that time, as a software consultant and did that off and on for several years. But then, you’re right, I worked for other people who were innovators and the creators of business, but I learned a lot from that as well. In that sort of technical profession, you have to be entrepreneurial by nature in order to make things work as well. But then, 1999 is when I truly did my first large scale startup. We took in funding, we were 38 people at the peak, basically, and we went after some big business, and we got acquired. That didn’t happen with my consulting business at 17. [laughs]
Andrew: Can you describe what it was like to take the leap from having a good job with a company that was spun off of Swedish-based corporation. So dependable company, good job, you then leave that to go start your own business, what was that leap like?
Interviewee: It wasn’t as dramatic as a lot of people think, and I think that has more to do with how you think about risk, and also what kind of heart you put in to your work. So, anywhere I’ve worked, I’ve always given it 110%. At that time, the spin off have gotten acquired by SAAB and we were a subsidiary of SAAB and I was a CTO there. I’ve gotten to a point where I’d put a lot of innovative thought into making this a product and taking it to market, which we did. But I also put in a lot of energy and heart into this thing. I just woke one day and I said, “There are all these things happening around me, I don’t mind putting all this energy into work, but I should probably do it for myself for a while and see where that takes me.”
It wasn’t a revolutionary thought, it wasn’t a dramatic mode, it just started as a process. After about six months, I had been able to fool a friend of mine to become a partner, really good, Martin Bergljung, who is a terrific software architect. I had been able to get the support of an angle investor. With a little over, I think, we had $40,000 in angel funding, we resigned from our jobs.
Andrew: So you really thought after you’ve got the funding to resign.”
“Andrew: So you waited till after you got the funding to resign?
Interviewee: Yes when we did this kind of on the side and got this angel funding committed.
Andrew: How much did you build on the side before you got your funding?
Interviewee: Nothing we had vapor work.
Andrew: Just a vision?
Interviewee: A vision and a powerpoint yeah.
Andrew: And did the vision include a business model? Did you say this is where our customers are gonna come from and this is where our revenues is gonna come from?
Interviewee: No we had ideas and we had a conviction, of course none of those ideas materialized the way we thought, but that’s just the nature of doing startups. I mean someone said doing a startup you gotta run like crazy and then change directions you know and so I think a 180 is a dangerous thing but I think course corrections along the way are just a necessary part of doing a startup and if you’re not willing to do then you shouldn’t be doing a startup.
Andrew: So tell me about that how did you, what did you think the direction was gonna be and then what did you have to change it to?
Interviewee: Well when we started elipses we believed that a lot of our business would be enterprise. As an example we believed a lot of enterprises would be building mobile apps, mobile works, course tap applications, they will need you know app stores. If they need a system that will make it very easy to access for the employee to download the apps you know and then manage all that. So we thought that that where we would find our business and we were wrong.
Andrew: Tell me how you figured out you were wrong I’m curious to see how those adjustments happened as you build a company.
Interviewee: Well I mean here was a lot of hyper and mobile first of all and the hype was justified because if you look at the enterprise as an example a larger portion of the work course is mobile. Not only are they working remotely but there also mobile in their daily activity and there were so many ideas and applications that should help any enterprise opptimise their business so the oppurtunity was there. Now I would say that the devises that came out didn’t support these apps. For example motorola made a huge mistake when they launched their first device that had an overway browser on it and job on it they took an existing phone I can’t remember the model right now they took an existing phone and changed nothing but the software inside the phone and they relaunched that. And people look at that thing and go on like ok what’s different you know. There was nothing, there were no apps on it, the form factor was the same, I mean mistake after mistake like that was bieng done and we failed to initially to see that quickly. I mean there was another company that launched in our category also with the support of some microcist thats called jamthat, they very quickly that the apps are going to be , sorry the oppurtunity is actually going to be in building the apps themselves not the platform. We build the platform and so jamthat they started to build games and even though sun invested in them they said forget that were’re going to go with ball comet brew and actually they went Ipo and got aquired by electronic arts possibly. They changed faster then we did basically but you know.
Andrew: When did you realize you needed to change?
Interviewee: We needed to realize that first of all our market would not be in Europe, well as soon as we realized that this is a consumer case and play we had to go look at a market that would use our model for engaging in mobile comdent, eye through the browser, downloading through the browser and then launch it. I mean it sounds obvious but it wasnt at the time. So the US market was the right market for that.
Andrew: Can you help me understand or take me through to the time when you realized it because a lot of the time when your in business and your hitting the one direction it’s hard to notice anything in any other direction and if things aren’t working out sometimes and especially if you have a partner you cheer each other on and you keep each other going in the same direction.”
“Andrew: …cheer each other on and keep each other going in the same direction. So the fact that you even realized it, whether it happened late or early or just on time perfect isn’t as important as how did you realize it so that the rest of us when we go through our situation where we’re going in the wrong direction might look back and say “Ah, Ricard, he experienced something similar; he adjusted. Let’s stop for a second and reconsider.” So, what was it like for you?
Interviewee: I mean, first of all, don’t ignore the data. Okay? You cannot justify something or discount the data. So, in this particular case, fortunately for us, we were still in Sweden, in Stockholm, at the time and Sun Microsysetms had decided to put their mobile business unit in Stockholm because Ericcson and Oak and all these companies were there and we ended up working with them and they opened a lot of doors for us with wireless service providers all over Europe and we weren’t really getting anywhere and, then you know, we started to talk to some carriers in the U.S. and in the U.S. not only were they willing to work with a little start-up but they were looking at the same model and when you sit down and just look at your track record you see that the traction is in the U.S. We need to move over there. And we did. And we did.
Andrew: I see. What got you started looking at the U.S. in the first place?
Interviewee: Well, it was actually primarily through this partnership, which is the other thing that is really important. The right kind of partnerships for start-up is crucial and the right start-up is defined by what it isn’t. A partnership with another dinky little start-up like yourself is going to go nowhere. What you need is a partnership with a solid, large corporation who is willing to champion your technology and be your chaperon and support you, and that can be through personal relationships or just a great technology fit. The reasons are many. We had been able to partner up with Sun Microsystems. Now, we weren’t the only company that they had partnered with but they were very supportive of us. So they said “You know what, we’re talking to Verizon,”—well, not so much Verizon—but “We’re talking to AT&T; we’re talking to Sprint. They’re getting interested in this whole mobile java idea. They want to talk to some companies, come on over.” And we said, “We’ll come over.” We went over and that’s how it started.
Andrew: I see, okay and then they introduced you. Let’s go back then to funding, speaking of introductions. Who is the “angel” and how did you meet him?
Interviewee: The “angel” is Leif Midean who is a very successful entrepreneur in Europe. He has had several businesses, but the thing that kind of provided him the opportunity to do angel investments was actually to develop a PC distribution chain in the former Eastern European block starting with Poland. There was no infrastructure in place there and he saw the opportunity, went down there and did it. He’s Swedish, by the way. I’ve known him since I was 17 and I had my little consulting business.
Andrew: How did you meet him at 17 as a consultant?
Interviewee: We did business with the largest PC distributor, in Sweden at the time. He was in the education space, teaching employees at different companies how to use computers and I was working for this distributor, fixing things, basically, and that’s where we met, and we’ve stayed in touch through the years.
Andrew: How did you stay in touch? A lot of times people will meet great contacts like that and lose touch or work hard to stay in touch but, as Heidi Roizen said here when I did an interview with her, they end up being pen pals, which isn’t a useful relationship. How did you make that relationship last?
Interviewee: Well, first of all, it’s okay if there’s a few years between staying in touch at times, but it’s good if you’re moving in the same circles or similar circles. You’re inevitably going to bump into each other. In this particular case with Leif, I would say that the fact that we have the same interests outside of business was very helpful.
Andrew: Like what?
Interviewee: He’s an avid windsurfer and so am I.”
“Interviewee: So, that helped a lot.
Andrew: I see. So, you would go win surfing with him?
Interviewee: Yeah. We would go win surfing together or we would bump into each other win surfing. I mean not physically, but, yeah, we would be at the same place and go to same events and stuff. So, that was always a lot of fun. And I always took a big interest in what he was doing and he did the same with me, so that’s how it was.
Andrew: See that’s interesting because a lot of people would say when they’re doing their hobbies, when they’re out there being active, they don’t want to see people from work. They don’t want to talk work with anyone. How much work was going on? How much of it did . . . How much of it felt like you were bringing the office into your hobby?
Interviewee: Well, I think, I mean if you’re taking any interest it’s somewhat, it’s life. It bound to be about work to, at least fifty percent. So, I mean, this was not sitting down discussing business deals or opportunities or stuff like that. This was about taking interest in the lives of each other and I think that’s different. Even though a lot of that is work related, you’re right.
Andrew: All right. I also don’t see in your background sales, that you were a salesman at any point. What was it like to sell someone on giving you, I think you said fifty thousand dollars? Or, 40, what was it?
Interviewee: Well, we started with 40. I mean we ended up raising seven million dollars for Elipses.
Andrew: So, what was it like getting that first 40 thousand from Leif [sp]?
Interviewee: We were, uh, this is the other kind of really interesting thing, and I don’t know if I’m, I think this is pretty common though. I mean with Leif we were excited, obviously because it was pretty quick. We were talking to him for a couple of months and then he said, “Okay, guys. I mean, let’s do this.” So, that was pretty exciting.
But, from that point on, anybody that does sales will tell you that it’s a process. And when you get to the end of that process and when you do the deal, if you’re not in a business, you would think, ‘Oh, that’s must be like winning the lottery.’ It isn’t. It’s anything but. It’s a long tedious process and maybe it’s a sigh of relief. But, the excitement isn’t really there. So, you have to learn to be excited about the process. So, I can’t say that we were opening up the champagne and celebrating all night the Swedish way or anything, it was a sigh of relief..
Andrew: What is the Swedish way to celebrate all night?
Interviewee: Get really hammered, I would say.
Andrew: [Laughs]
Interviewee: I’m too old for that. [Laughs]
Andrew: Just like the American way.
Interviewee: Well, yeah, maybe, yeah.
[Laughter]
Andrew: Okay, so, you get that. Actually, let’s talk about your age. I have a note here to come back and ask you about that since you said you were aging yourself. How old were you when you started that company?
Interviewee: Elipses?
Andrew: Yes.
Interviewee: Yeah, so, Elipses was 1999, I was 34 years old.
Andrew: Okay. I had it here you were 37. 34 years old. The reason why I asked is because a lot of times people assume that you’ve got to be in your early 20’s or late teens in order to start a business and anytime after that it’s just impossible because you have obligations because you’re stuck in your rut. Frankly, I use to believe that to.
Interviewee: Yeah.
Andrew: I want to just keep highlighting the situations that don’t fit that stereo type. So, what was it like for you later on to do it, later on in life? Not that 37 is that old.
Interviewee: Right. It’s 34 by the way.
Andrew: I’m sorry, 34. I’m thinking, my guess is 37. So, I’m thinking of my own guess. Super imposing my answer. Sorry.
Interviewee: [Laughs] No problem. Well, first of all when I started Elipses I still didn’t have any kids. I wasn’t single, I got married that year. So, we got married, started the company. But, I would say this, anytime you’re decide to start a new business, it has it’s pros and cons. If you’re like a PHD or you’re working on your master’s at the university, and you’re in your early 20’s, you have certain assets. Like a stamina that is incredible probably and no distractions, maybe a nagging girlfriend or something, but other than that no issues.
But, you lack experience and you make up for that by being maybe arrogant, but actually it’s ignorance. And actually ignorance can be an asset if it’s properly applied.”
[This section of the transcript (minutes 30 – 35) is being redone by the transcribers.]
“Interviewee: Total cash and stock, yes.
Andrew: And you had 8% of that? Can we do the math on that and kind of figure out?
Interviewee: We can do the math as much as we want.
Andrew: No, we don’t need to do it together, I don’t want to get that detailed. I just want to get a sense of what happened?
Interviewee: It allowed me to invest in a couple of houses and to save some money for my next startup.
Andrew: I see, okay. Alright, how did those investments turn out for you?
Interviewee: Well, I am still living in one of them and the other one were are traveling to in the end of the month.
Andrew: You still have them, you haven’t sold them, you haven’t flipped them or anything?
Interviewee: Yeah, that’s why I am reluctant to call them investments. They are life investments.
Andrew: I have seen people winded up doing better with their real estate that they bought after they sold their business and they did with the business or anything afterwards.
Interviewee: Yeah, that can happen. We’ll say I am hoping that these places will stay in the family for a long time.
Andrew: Where are you by the way, where in the world, today?
Interviewee: I am in Santa Cruz, California, it is a small enclave here on the coast.
Andrew: And you still own place in Sweden, is that where the other place is?
Interviewee: We bought a little summer house on the north tip of one of the popular islands for summer vacation, yeah, and incidentally the area where we had our wedding reception when I got married to.
Andrew: When did you get married?
Interviewee: When, 1999, same year as I started my first company.
Andrew: I see, so you went to back where you got married, and you bought a place there.
Interviewee: Yeah.
Andrew: Cool, still married?
Interviewee: Oh yeah. Absolutely. My wife is my biggest investor in me.
Andrew: Did you have kids now I think you said.
Interviewee: Yes we have kids.
Andrew: At what point did you get, did you have kids?
Interviewee: My first kid was born the year I started to [unclear] in 1999. So he is 10 years old now. The second kid was born a year before we got acquired, two years later, so she is 8, and then we had a little straddler show up here three years ago as well. So I have got three kids, keeps us really busy on weekends and evenings and my wife is working part time so she is taking care of lot of that fortunately for me. That is lot of fun.
Andrew: What was it like, it is also very demanding, what was it like to have your first child just as you are building your business, just as you are getting ready to take off?
Interviewee: It was tough, especially for her I believe, I think men are little bit, when the kids are one or two years old, it is more fun when they can walk and you can run around with them, so for me it was okay, but for her, I had some extreme like 200 travel days during the first year and so I was largely absent but you got to have a good partner, that’s the key thing here and I have a good partner. She is very resilient and positive person, so it is key. You got to pick partner even in private…
Andrew: You are kidding, that’s the most important partner you are ever going to get, that’s a partner for life whether it turns out good or bad.
Interviewee: Yes, exactly. So it is as important in business as in life, privately.
Andrew: Do you have any advice for somebody who has a child soon after launching your business. What did you learn the first time around?
Interviewee: Well, what I learnt, it was really how important your spouse is and to managing the stress. The amount of stress a couple can generate from sheer friction is incredible and there is so much stress that you really don’t need. There are so many issues and problems that you really don’t have time for and shouldn’t be worried about and if you can find that sort of Zen of life where you learn to just focus on the important issues that thinking get a lot of stuff done.
Andrew: Alright, how do you go after running your company, after being the captain, how do you end up working for two different businesses over six years, what was that like?
Interviewee: Well, I mean if you look at it, at Openwave, I end up being the captain, like one of the Little Emperors over a couple of product units. Actually, those product units were twice the size of Ellipsus, so it was certainly was like running a business within the business. But of course, I learned a lot about kind of corporate politics as well, and I think, I learned fairly quickly how to navigate that as well. So that was the added sort of dimension, but it was really like running a business, both at Openwave and then at Venturi Wireless where I was the Product Manager there as well. Again, you have profit/loss responsibility, you got to take the product to market, you got to make sure it’s doing the right thing at the right price, etc. So, I mean, it wasn’t different. It was just that your ownership is different. You know, you own less.
Andrew: Can I just say I notice the mistake that I made as an interviewer? As I ask that question, I notice that I was making a face and also acting like how do you go from being a free man to being in jail, which is just no way to do an interview. What I really need to find out is what it was really like, not how bad it must have been, not impose my own expectations on the situation. So let me ask the reverse of that, what was good about that? What did you notice about working somewhere else, going back to having a job that actually was better, that was reassuring?
Interviewee: First of all, if you work for larger corporation, you will develop your personal network very, very quickly. If you work for a company like Openwave Systems, at the time, it was the best company to work with in terms of meeting great people, and who since then moved on and done great things. Several of my friends ended up going over to AdMob and AdMob got acquired for over $700 million was just approved. All the people going to Google, Yahoo, Microsoft, via Danger Research, etc., etc., just great, great people that I’m still in touch with today, and who can be helpful in the future. You help them, they help you, and you can’t take any of that away from you. So that’s helpful. Also, like I said, learning more about corporate politics and it’s always going to be there large or small. In a large corporation, it’s significantly more complicated usually. So, navigating that is good. So, I think, very, very positive experience for me.
Andrew: How does the stress level compare, in your case?
Interviewee: You’re asking the wrong person because I think that’s part of being kind of a startup guy and entrepreneur. The stress level will never go above here. [laughs] You know, it doesn’t matter. The responsibilities are largely the same except that I’m responsible to other people, I’m not responsible to the investors. I’m responsible to the CEO or the General Manager for the infrastructure product unit or something. So there’s a responsibility there, and that’s no different. It’s just that it’s based on different aspects. So for me, it wasn’t any different, really.
The difference, though, would say, with my most recent startup, the difference is financial. So with this startup, we really decided to put in our sweat equity even though we raised a million dollars in seed funding, we haven’t taken any salary ourselves. A lot of people call themselves startup guys and they’re basically moving on, getting someone to invest, and then they give themselves a hefty salary. If it doesn’t work in six months, they all do something else, but we decided not to do that. We had the luxury that we could afford to kind of invest our own into it, with the hope that we would keep more of the company also, at the end. So, it’s not a charity business for us, but there were some ideas doing it that way. But, that has been a big difference for the family, we have to be more careful with the economy. We’ve been at it for two years, so we’ll see how it goes.
Andrew: You launched the business in 2008. What was the original vision?
Interviewee: The idea was, I mean, it was born out of frustration with daily life actually, and trying to become more productive. Like most people we have a hectic business life and we have the family as we discussed; with kids and etc. and I really needed to save time as opposed to waste time. And we were struggling, both Vercan and I we were struggling with using the internet to be productive and so the idea was to create a solution that would reduce the clutter on the internet and make sure we can stay focused on whats relevant. Its turning into a syndication service that allows publishers to syndicate content in a high attention environment and it allows the consumers to organize whatever they do on the web, we call them web activities, you know. Organize that in a way that they can pay attention at the right time to stuff that is important to them. And web activities would be; looking for a job, looking for a good deal on a laptop, finding the right airfare to Sweden etc. etc. Those are all activities that we do and we do them repeatedly so by automating that process and then organizing the results in a, what we call a list, a subscription list. Its essenetially organizing stuff in a task list but making sure the task list is organized in the right order at all times for you. So.
Andrew: So lets use the examples that you just gave. I am thinking of going back to the U.S. in a couple of months I’m now in Buenas Aires.
Interviewee: Ok
Andrew: I do a search for airfare everyday until I find a great rate.
Interviewee: Yes
Andrew: That would be an activity that would be on the site?
Interviewee: Yes
Andrew: If I were also looking for a job, I might look every single day instead of going out to other sites and getting distracted and doing the same search repetitively, I would just bring that search to my ingboo page.
Interviewee: Yes.
Andrew: And maybe a couple of other things like stories that I might read on a few websites that I’m into.
Interview: Yes
Andrew: And all that would be on the web page and the idea is, is that I can then sort it based on high priority and low priority
Interviewee: Actually, actually, actually the system sorts it for you. The system has, there’s a building algorithm that we have pantented that will organize all this stuff; based on its age, how old it is, and how important it is, and how your are interacting with it. So its a learning system also. So the idea is really not to require users to have to configure stuff. Because when you do that, it won’t be mass consumer or consumer friendly. It would be back to the early doctor.
(laughing)
Andrew: Oh I see, so if im interacting with one activity often; like the job search everyday, then the system says aahh, thats a high priority activity for him, hes going to it everyday lets have that bubble to the top. If I’m subscribing to the Wallstreet Journal but i really don’t read it everyday, that would just get pushed down to the bottom.
Interviewee: Yeah, it straight goes down to the bottom for you on your list and then of course it’ll expire. And then if there is new information it may perk up towards the top again. Its fairly dynamic environment. And then we made this available now in popular destinations. I mean you can consume this list in Facebook, you can consume on mobile devices, you can consume it on a portal and by Twitter as well. So its really about making sure that your activities are with you where ever you spend your time on the internet. So.
Andrew: How are you getting users with this service, the consumers, how are you getting them on?
Interviewee: Yea, so really, we are, our partner, we are partnering, so here it goes back to the partnerships. So, we are partnering with publishers. For example, our biggest partner is Technorati.com out of San Francisco. They use our service to provide a connective search function to their audience. You go to technorati.com and you got the search window there in the center. I may be interested in iphone 4.0 right or whatever. And so I put in iphone and then they list all the articles around that iphone. And the user can now click a little button or function that says connect with the search, and consequently that ends up in the users list and if there is a new article popping up related to that search, they will get notified and they can go back and read that article
Andrew: Notified by email?
Interviewee: Email, tweet.
Andrew: And then it brings them back to the article on technorati or on?
Interviewee: Yes. it brings them back to the article in technorati.”
“Interviewee: Brings it back to the article in Technorati but even the email, you don’t get any email for everything that changes, you get a digest. This is about reducing the information, reducing the clutter, so it gives you digest, there may be updates from Technorati and your job search and that laptop you are looking for. So you get that digest in the morning once and then you can review that and you may be clicking on one of the topics so you may be going and look at a whole list etc. You can do all kinds
Andrew: What’s the business relationship behind that? Do you pay Technorati to be able to serve that up and then you earn advertising, do they pay you for the technology?
Interviewee: No, it is a revshare relationship based on contextual advertisement. So the updates are being generated, we monetize those, and this opens up a new venue for monetization for a publisher, we call it preview monetization if you want, and we monetize it even in Facebook, so
Andrew: How do you monetize the updates? Ads within the stream or something else?
Interviewee: Yeah, in different places but in the stream, if we create a list of new search items from Technorati around the iPhone for example, well that user is obviously interested in consumer electronics so we will match a suitable ad with that context, someone selling iPhones etc and at a place in that context. So that goes with the email if it is an email update. If the user goes to our portal, show in the portal, and of course if he looks at it in Facebook, the user will see that adding Facebook to it.
Andrew: Mike B in the audience is asking how did you get Technorati to pay attention? So how did you make that relationship happen and broaden it a little bit?
Interviewee: Okay, so if you ask me about another publisher how do you get Forbes to pay attention for example, I would say
Andrew: Okay, are you working with Forbes, I didn’t see their logo on your site?
Interviewee: Well, I can’t talk about Forbes unfortunately, but there was an offer on the table but it would cost us too much to do. So pay, get attention, okay, money gets people’s attention. So in the case of Forbes, money would have gotten their attention.
Andrew: Do you pay upfront?
Interviewee: Well, it depends on what the publisher’s base [unclear]. If publisher is kind of like a Forbes, a traditional old media kind of publisher, they are going to hate me for saying this, but they are more driven by, maybe their quarterly quota and they want to get x million dollars in ad revenue as opposed to looking at a strategic partnership where they can really monetize their content syndication over time in a rev share agreement, maybe even get a piece of equity in the company for doing it, all the kinds of things, and they are just not interested. Technorati on the other hand which is a new media type of company who are really looking to drive new business malls on the internet, they understand the internet [unclear], they are more interested in looking at new technology. In their case it was all about timing. They were looking for a new syndication solution for their content, and they have decided that they did not want to do it themselves. So we ended up approaching them when we were at the [unclear] Vegas in October, go to conferences, best place to meet potential partners, that’s my recommendation. You can corner them, they will listen to you, they dare to talk to you, and don’t forget to do the follow up. But anyway, so we started there and it was good timing for them. It was good timing for us. But you have to have a valid proposition that makes sense for the publisher.
Andrew: Alright, finally, how can people check this out? Should they go to your website to ingboo.com to experience the product, should they do something else.
Interviewee: If you are a consumer you can go to ingboo.com and look for the consumer button down to the right.
Andrew: It is right on the bottom of the page.
Interviewee: To the right, yeah. Or you can go directly to ingboo.com/pvm/portal that will take to the consumer portal directly.
Andrew: So [unclear] just link to that ingboo.com/pvm, okay and you are going to say one other way?
Interviewee: I was going to say, or you can go to one hundred so partners, like Technorati or Dragon Blogger is a blog that is using us, Deals of Americas and other site that used to connect the search to track deals, so those are the ways to explore it.
Andrew: Or they could meet you at a conference and corner you there and talk to you about the software and the website.
Interviewee: Yes, yes. We are cheap, we don’t have a booth.
Look for the guy who is running around trying to corner other people and corner him.
