Archive for the ‘Company Profile’ Category
Monday, October 10th, 2011
By Allan Maurer
 Zack Urlocker, COO, Zendesk When Groupon signed up with San Francisco-based Zendesk, which sells a web-based help desk service, it employed only 10 people. Today, the company still uses Zendesk and has 2,000 people using it now in a dozen different countries. Groupon is only one of the high profile online clients using Zendesk.
Others include Hulu.com, the blogging service Tumblr, and the file sharing service, Dropbox. Clients also include Sony Music, Open Table, Sears, and Adobe.
The company was founded in Copenhagen by three software industry veterans in 2007. The 120 employee company has global offices and boasts 4X growth from 2009 to 2010.
The venture-backed company raised capital from Charles River Capital, Matrix, and Benchmark Capital.
Zendesk COO Zack Urlocker tells us the cloud-based service, which costs from $9.99 a month for a starter program up to $99 per agent for the Enterprise version (with annual discounts available), solves a number of help desk problems for its clients.
“We’ve all had that help desk experience where they tell you that’s a different team and you have to tell your story all over again.” Can you think of a few times that’s happened to you? I certainly can.
Zendesk eliminates that problem by making sure each successive agent all of the caller’s information.
It also lets agents handle service requests through multiple channels, such as email or a portal (such as Tumblr’s). It has voice capabilities for online service chat.
It tracks a fair amount of data and includes 20 built-in reports and dashboards that provide analytics. Those include the ability to see when queries are coming in – hours, days, months.
Like many types of software once only available to Enterprise sized businesses due to their cost, making Zendesk available in the cloud is what makes it more affordable to businesses of all sizes.
“Customer experience software used to be expensive,” admits Urlocker. “It required six months to implement and cost half a million. We’ve made this affordable to smaller companies. Some of those might grow into a Groupon or an Open Table, but everyone should be able to get good service.”
Tags: Dropbox, Groupon, Hulu.com, Open Table, San Francisco, Tumblr, web-based customer service software, Zack Urlocker, Zendesk
Posted in Cloud, Company Profile, Internet/New Media, IT | Comments Off
Thursday, July 21st, 2011
 Travis Potter By Allan Maurer
New takes on the social network meme pop up almost daily. URVEW, founded in January this year and currently only available to colleges and universities (you need a .edu address to sign up), is the first video micro-blogging site. The company launched just prior to Tech Media’s Digital Summit in Atlanta where it was a demo company earlier this year.
“Our goal is to connect the world thorugh video communication,” explains Co-founder and CRO Travis Potter. “Current social networks are not personal enough. Video is the best way to get across feelings and your overall self.”
The company, self-funded with one angel investor, is currently a web-only platform that plans to make money with an advertising model. It will eventually also do mobile apps, Potter says. “We may do a premium model. Right now, videos are limited to 20 seconds or less. We might charge a bit if people wanted to make longer videos.”
We checked out the site and found it still a bit underpopulated, but Potter says they’re gaining users steadily and once it’s open to the public, more are expected. The sound seemed a bit rough on the videos we watched, mostly people just chatting a bit.
Potter says he conceived of the site three years ago. “People thought it would be boring, so I put it on a back burner,” he says. “Then, driving back from DC with my partner, Josh, (Josh Clark, co-founder, CFO), we were talking about celebrities and all the exposure they get and the idea came back, the name, the features, all at once.”
One thing making the site different from posting a video on Facebook or Tumblr, Potter says, is that “You have a live count, how many people are viewing you in real time.” That might be useful to a politician running a campaign or other commercial users, he says.
With the aid of Clark’s business skills and friends, now part of the company with tech design skills, they created URVEW.
Currently headquartered in Lynchburg, VA, where the team attended Liberty University, the firm plans to move nearer to DC, Potter says.
The site should be open to the public soon.
URVEW is seeking a seed round of at least $100,000, he says.
Tags: Digital Summit, Josh Clark, Travis Potter, URVEW, video micro blogging
Posted in Company Profile, Internet/New Media, video | Comments Off
Thursday, June 30th, 2011
By Allan Maurer
 ATLANTA – People talk a lot about the way software-as-a-service (SaaS) has enabled many businesses to afford technology that only the largest firms could buy under licensing models. But the other side of the coin is that SaaS also makes creating a technology company much easier and less expensive. “We would still be in the garage if not for the SaaS revolution,” says Steve Bachman, CEO of Atlanta-based AuditMyBooks.
Instead, the company, founded in 2008, helped small businesses scan nearly 1.9 million QuickBooks transactions for fraud or errors in the first two months of 2011, saving its customers nearly $12 million, the company says.
Bachman explains, “The AuditMyBooks Analyzer scans QuickBooks for more than 20 different warning signs of errors and fraud. Assuming you could run the same 20 tests manually at the rate of 1 transaction analyzed every 5 minutes, it would take more than 157,000 hours to analyze 1.9 million transactions which represent a cost to businesses of almost $12,000,000.”
Accounting errors common in small businesses
Accounting errors are unfortunately quite common in small businesses. Sixty percent of such errors result from simple bookkeeping mistakes or misapplication of easily understood accounting standards. Although unintentional, mistakes can still lead to bigger issues like penalties from erroneous tax filings.
Fraud is also an ongoing problem for small businesses in the U.S. The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5 percent of their revenues to fraud, and small companies represent more than 30 percent of all fraud cases. ACFE research also shows that small businesses suffer the highest median losses of any sized company at nearly $150,000 per occurrence.
Repurposing security tech
The company, funded by the management team and grants from teh National Science Foundation and SBIR grants to the tune of $180,000 with another $500,000 Phase II grant in progress, was started by a group of tech execs who had worked together and had a variety of skills and experience, Bachman says. They have combined experience in financial systems, information security, spyware, intrusion detection, and content filtering and management.
They asked themselves, “Why can’t some of this technology used for identifying threats in information security be used in other ways?” They indeed found that they could use some of that forensic technology on financial transactions instead of file downloads or web transactions.
Then they asked themselves that other ultra-important question of the successful entrepreneur: what market is underserved?
It certainly isn’t large enterprises, Bachman says. “They have lots of resources and money and they get everything,” he notes. “But we saw a monster hole in tools and technology to protect small businesses. They have a need that lacks a good solution without an expensive and time-consuming end-of-year audit and review.
“It’s a $944 billion a year problem affecting 30 percent of all small businesses,” Bachman says.
So, when Intuit, which makes QuickBooks, which owns 71 percent of the small busines accounting market, introduced the Intuit app center, the AuditMyBooks team saw a big opportunity – 4.5 million QuickBooks users looking for complementary solutions.
AuditMyBooks standalone app is cloud-based and connects to QuickBooks via the Intuit app center, so Intuit is handling all the hosting.
“We’ll enhance the product over time,” says Bachman, who adds that the 12 employee company may seek growth funding toward the end of 2011.
Tags: accounting for small busiensses, Allan Maurer, Atlanta, AuditMyBooks, AuditMyBooks Analyzer, error and fraud protection, Intuit, Intuit app center, QuickBooks, Steve Bachman
Posted in Company Profile, Georgia, Internet/New Media, IT | Comments Off
Tuesday, May 10th, 2011
By Allan Maurer
 Shannon Bauman DURHAM, NC – How do you get Google employees to move to Durham, NC and join a startup? Persistence worked for Spring Metrics, an analytics company that helps e-businesses understand what drives their revenue online. The company has signed two former employees of the search engine giant, a former product manager and an engineer.
“We didn’t actually look specifically for people who worked at Google. We were just looking for people we think are the best out there,” says Doug Kaufman, co-founder and CEO of Spring Metrics. But, he adds, “It does make the interview process easier knowing that Google puts them through the wringer.”
Google is known for its rigorous and daunting employee interview process.
Shannon Bauman, the former Google project manager, for instance, was asked: How many tennis balls fit in a 747? Why are manhole covers round? What is the air speed velocity of an unladen swallow?
Bauman was at Google’s Mt. View headquarters for most of his four years with the company, but spent a few months at its Chapel Hill office prior to co-founding Spring Metrics. “There were a lot of smart people at Google,” he says.
“It was a shock to be in an environment with so many people smarter than me. It was daunting at first, but you learn to value it. There is a very open and collaborative environment there that helps foster the ability to get information from other people’s brains and make better products.”
Bauman says that when he started at Google, “It had 2,000 people. Four and a half years later, it’s 20,000 people. I was really more interested in working with smaller companies. I figured I’d learned a lot at Google, but the the things I’d keep learning by staying there were not as important as those I would learn by going to a startup. I thought of doing one myself, then met Doug and joined Spring Metrics.”
Networking paid off
He notes that he did a lot of networking when he first came to the area and “The Google name got me through a lot of doors.” At a Southern Capitol Ventures brunch, Jason Caplain introduced him to Kaufman.
“I love the Triangle,” he says. “The people the greenery, the space. It has so much going for it.” He admits, however, it is a bit harder to do a startup because there is less venture capital and angel money and fewer engineers than in Silicon Valley. “The more people you have in an ecosystem, the more things happen. California has ten times more people.”
Spring Metrics got its start with Launchbox Digital, the only Southeast accelerator to make a list of the top ten in the U.S., recently, then nabbed a $635,000 seed round from LaunchBox Digital, CBC New Media Group, Zelkova Ventures and Steve Vanderwoude and Lee Buck. The company’s product simplifies Web analytics to show only the data affecting the bottom line. It lets users see what is driving revenue and how they can actively generate more conversions.
Kaufman says that “If it were not for LaunchBox Digital, we probably would not have started this. Because of it, we knew we would have a much better chance of getting funding.”
A startup can do what a big company can’t
 Patrick Scott The company also set its sights on a Google engineer, Patrick Scott. The firm started talking with him at a very early stage, but as he saw where the company was going, “He realized it wasn’t going to fall off the map in five days,” says Kaufman. “So he got more comfortable and excited about a startup.”
But there was one other piece that worked in Spring Metrics’ favor. “There is something a startup can do that a big company can’t,” says Kaufman. “That is to really show someone how valuable they are. For us, pursuing this engineer, he knew we could only hire one guy. We showed him and told him how valuable he would be to us. We didn’t want just any engineer. We wanted him.”
That, he notes, “Goes a long way with people.”
Kaufman says the five-employee company is working on taking its product to another level. “We’re going to make this more useful, bring on another marketing person and bring on customers,” he says. While the firm is not looking for additional backing right now, “We will be,” says Kaufman.
Tags: Doug Kaufman, Durham, former Google employees at Spring Metrics, Google employee hiring questions, hiring Google employees, Jason Caplain, NC, Patrick Scott, Research Triangle, Shannon Bauman, Southeren Capitol Ventures, Spring Metrics, web analytics
Posted in Carolinas, Company Profile, Internet/New Media, IT, Marketing, North Carolina, People | 1 Comment »
Tuesday, March 22nd, 2011
By Allan Maurer
 RALEIGH, NC – The local deals and online coupon space may save consumers money, but they’re almost too much of a good thing. There are too many of them playing in the space, not just Groupon and LivingSocial, but hundreds of smaller firms and websites offer a myriad of savings on local restaurant meals, events, a variety of services, groceries and way too many spas. Raleigh-based Redeemio brings them altogether on one site – and let’s you specify the types of offers you prefer and also learns what you like from your later choices.
As someone who uses some of those services occasionally, we thought that sounds like a good idea. Reedmio, founded in June 2010, isn’t alone as a daily deal and coupon aggregator. Yipit and Dealmap, which just signed a partnership with Microsoft’s Bing search engine, are its top competitors, and more are likely.
Redeemio Co-founder Chris Leithe tells us the company, founded in June 2010, already has good traction. Bootstrapped by its founders, the three-person company is in 120 markets in the U.S., including all of the tier one and tier two and a lot of tier three cities. It’s looking for some growth funding in the $250,000 to $500,000 range, not the easiest bracket in which to raise money.
It makes money as an affiliate of the deal firms it aggregates, taking a small percentage of each sale, but Leithe says it is looking at additonal revenue streams.
Users sign up very easily at the Redeemio.com site and can fill out a form identifying the types of offers they prefer or simply go to all the offers near them. Ours for today included three restaurants and…hold your breath…a spa. Still, we grabbed several book deals from various daily deal purveyors in the past and we expect to try some new restaurants this way too. So it is handy to see everything of interest to you in one spot.
Leithe says he expects to see some additional consolidation of the local daily deals space, with Groupon and LivingSocial already making acquisitions. In the deal aggregations space, though, he says he expects more competition to enter the market before an ensuing fall out with mergers and acquisitions.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: Chris Leithe, group buying, Groupon, LIvingSocial, local daily deals, Redeemio
Posted in Carolinas, Company Profile, Internet/New Media, Marketing, North Carolina | 2 Comments »
Monday, March 21st, 2011
By Allan Maurer
 Martin Green MT. VIEW, CA – Where do you get your suggestions for movies or music you might like, a restaurant to try, or a new video game to play? Most of us always got the recommendations we trust most from friends. These days, most of us online get still get them from friends, but via Facebook, Twitter, email and other digital social connections. Meebo extends that online friend network across all of your web and mobile experiences.
Meebo enables users to share content and communicate in real time with the people who matter to them, connecting people to their friends on the numerous websites that have installed the Meebo Bar, through mobile devices and via Meebo Messenger.
Martin Green, chief operating officer of Meebo, says Meebo currently has 78 million unique users in the U.S., 165 million worldwide and a syndicated toolbar that runs on about 8,000 web sites.
Founded in 2005, Meebo has raised $70 million from investors who include Sequoia Capital, Khosla Ventures, Draper Fisher Jurvetson, JAFCO, Time Warner and KTB.
Persistence of the experience important
Green acknowledges that the company has competitors attempting to unite users’ digital social experiences. The differentiator at Meebo, he says, “Is the persistence of the Meebo experience. If you use it on the web, it’s in the same place and on every page. No matter what network your friends are on, we make them available to you, so you stay connected with the ones you want to.”
He adds, “It keeps a user connecte with the people who matter to him as he navigates interests and content around the web. We make the web social. You can go to a game, news, or product site and your friends are there so you can talk to them or share a link. It’s a very reliable experience, and that’s important.”
Green oversees the company’s product management, business development, sales, marketing and revenue operations teams. An early Meebo user, he was the first executive to join the company.
Participating in Atlanta Digital Summit
Green is among the digital media mavens slated to participate in TechMedia’s Digital Summit at the Cobb Galleria in Atlanta May 16-17. Green says you will likely hear him talk about the way “A lot of social discussion today is focused around who you know. We think a lot of the future will be in taking advantage of connections between people who don’t know each other, but who share interests.”
That’s actually already happening via sites such the Internet radio station Pandora, which shows you more music based tunes liked by people with interests similar to yours, or Netflix, which does the same thing with movies, and Amazon, which does the same thing with books.
It’s not an exact science yet, Green notes, mentioning the million dollar contest for an algorithm that better predicts user preferences (won by BellKor’s Pragmatic Chaos, which beat the Netflix algorithm by 10 percent).
Green worked with Meebo’s founders and initial team of 10 to focus the company’s strategies and objectives. It now employs 150 people and is growing from 20 percent to 30 percent a year.
A lot of the growth came from building up its sales team to pitch its rather unique advertising deal.
Web is filled with impressions no one clicks
“The web is filled with ad impressions no one clicks on,” says Green. Meebo has developed a system that not only grabs ten times more clicks than usual with a display ad, it gets about 60 seconds of engagement with the user, which is longer than most TV ads these days, Green points out.
“The user chooses to interact with that content,” he explains. “They remain in control.”
How does Meebo accomplish the higher click rate and greater engagement?
“It’s a lot of little things,” says Green. “One of them is persistence. The Meebo bar doesn’t scroll away. Lots of banner ads are bigger, but they scroll away in seconds. Ours are smaller but stay around longer, so they have a better chance of being noticed.”
Also, he says, “The way it’s designed it takes away the anxiety of interacting with normal ads. You hesitate because you have no idea where it’s going to take you. Meebo ads all work the same way. You don’t leave the site. The message comes to you.”
Go to a site that uses the Meebo system, such as TVGuide.com, look in the lower left hand bottom corner of the page and give it a spin.
Tags: Atlanta, Digital Summit, exteding social across the web, Martin Green, Meebo, online marketing
Posted in Company Profile, Events, Facebook, Internet/New Media, IT, Marketing | 1 Comment »
Thursday, March 17th, 2011
 Tim Harrington By Allan Maurer
ATLANTA – It takes a while to build a successful Web business, but eRollover, which strives to provide its users with unbiased retirement information, “Is on course now,” says CEO Tim Harrington.
Although founded two years ago by Mike Rowan and Corbett Gilliam, the site originally consisted largely of links to articles. The company brought Harrington, who has 15 years of experience with startups in Silicon Valley, on board in late 2009.
He revised eRollover’s business model.
“We’re just now launching my vision for the company,” Harrington says. It’s in a good position to do so. It raised a $1 million second round from Atlanta’s Imlay Investments in 2010. “We have an all-star management team and money in the bank,” Harrington says.
Harrington was formerly President and CEO of Fogdog Sports, an e-commerce site for sports enthusiasts, recognized by Fortune Magazine as a “world class” customer experience on the web.
He negotiated an exclusive operating and equity agreement with Nike Inc., their first e-commerce partnership. He raised more than $100 million from private and public financing, and guided Fogdog through a successful IPO with CSFB as lead banker. Following the IPO, he successfully completed a merger with GSI Commerce (Nasdaq: GSIC).
Will be at Digital Summit in Atlanta in May
Harrington is among the dozens of industry thought leaders in the digital domain who will be participating in TechMedia’s Digital Summit at the Cobb Galeria in Atlanta May 16-17.
Harrington says his vision for eRollover can bring the power of social media and user reviews and comments to the financial services space, specifically to provide non-biased retirement information to the Gen Xers who are likely to need it, because they lack the pensions and other plans that many baby boomers enjoyed. “They won’t have the same security and will need to know how to plan for the future,” says Harrington.
Unlike brokerage houses and other sources of retirement planning information, eRollover can provide unbiased information because it isn’t trying to get its users to sign up for specific retirement or money management services.
Speaking of products offered by firms focused on selling their own products, Harrington says, “Even their analytical tools are aimed at leading you down the path of investing there. There is a huge void in being able to find unbiased information, independent advisors and tools and we think we can fill that void,” Harrington notes.
The WebMD of the retirement planning space
“We want to be the WebMD of the retirement planning space. We won’t displace brokers and advisors any more than WebMD displaced doctors. It will just make consumers more educated.”
One way of doing that is to develop a community that provides peer evaluation and comparisons. Most financial services sites are geared to keep the user on that specific site, not offer unbiased comparisons.
“Think of the power of what has happened with Facebook and Twitter and social media. Before social media, if you wanted to go to a restaurant, you might check out its website to read the menu. Now you go to Yelp and read customer reviews. If you’re going to buy a book, you go to Amazon and read reviews. People trust their peers. So we’re introducing social media into financial services right at the peak of its Gen X user base.”
We asked Harrington if he has advice for devising a social media strategy.
“You have to create a true community,” he says. “Too many people are using it as a one-off game, almost a bait and switch. In a community, users not only get something, they give something. It has to be a full 360 degree circle.”
That doesn’t preclude using hooks. ERollover does. “We put the hooks out there (such as contests) to get them interested, but also provide interesting blogs, videos, articles and tools of compelling value. Hopefully, they will share some of those. But the key thing is that you need stickiness and an overall compelling experience.”
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: compelling value, Digital Summit 2011, eRollover, facebook, finacial services, retirement planning site, social media, stickiness, twitter, WebMD
Posted in Company Profile, Events, Facebook, Georgia, Internet/New Media, social media | Comments Off
Wednesday, March 16th, 2011
 By Allan Maurer
ORLANDO, FL – FindVenture.com, an Orlando-based Internet company has just launched its site, which connects entrepreneurs and startups with investors, but already has five deals in term sheets and expects to see its first deal close by the end of the first quarter.
Founded in 2010 by David Bayer, CEO of DataBanq and of ChamberofCommerce.com and a founder of Chamberperks (2002), a web-based group buying program in Flordia, and Seth Ellis, managing partner of the $450 million Florida Mezzanine Fund, the site is free to both investors and entrepreneurs. DataBanq and the FMF funded the project.
Investors can pay a membership fee for increased deal flow and more sophisticated deal matching/searching features.
“Entrepreneurs and CFOs are turning to the web to find investment and lending resources,” said Bayer, managing partner of FindVenture.
“What they are finding is that most investors are still operating offline and seeking deal flow by utilizing traditional methods. FindVenture.com brings both the investor, or fund, and the business owner or entrepreneur into a more efficient marketplace exchange.”
Using a sophisticated matching algorithm, FindVenture connects investors with individuals and organizations. “Eliminating the need to filter through investment opportunities that don’t fit the core criteria of a fund saves both the investor and the business a tremendous amount of time,” said Bayer. FindVenture.com provides detailed profiles of both funds and prospective investment companies, in addition to a platform and subscription model similar to Monster.com, where like employers; investors have access to view prospective investment opportunities.
Bayer tells us, “Our focus is on creating enough deal flow that we can attract a senior management team and raise money to deploy to the deal flow as a venture fund. Similar to what Lending Tree has done by starting off in mortgage lead generation and then eventually becoming a mortgage underwriter themselves.”
The five-employee firm has more than 50 funds/investors registered on the platform in just its first 30 days.
We asked Bayer what differentiates the company from others in the space.
“We are in a unique position,” he said, “in that we have no immediate need to make money off of our customers. Our model – instead of needing to make money off of investors, entrepreneurs or the connecting of the two – our focus is simply deal flow.”
He added, “In partnership with Acxiom and ChamberofCommerce.com, we have a direct communication channel to more than 14MM businesses. Using a sophisticated algorithm we are able to identify those businesses which are likely to need and qualify for funding and approach them directly to participate in our platform. The net result, higher volume and quality of deals in the system and a fraction of the cost of most other companies in the space.”
. When a business posts a funding request on FindVenture.com, they put their idea and business plan in front of thousands of investors and funds. Additionally, FindVenture provides small businesses and entrepreneurs with the resources and education to find the fund that’s the right fit.
FindVenture’s resources section provides insight into the fundraising process with articles written by industry leaders such as Karen Klein – an expert in small businesses and entrepreneurship who has appeared in Bloomberg Business Week and the Los Angeles Times for more than a decade.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: ChamberofCommerce.com, Chamberperks, DataBanq, David Bayer, FindVenture.com, FL, Florida Mezzaanine Fund, Orlando, Seth Ellis
Posted in Company Profile, Florida, Internet/New Media, Money | Comments Off
Friday, February 18th, 2011
By Allan Maurer
 ORLANDO, FL – Getting airline profits off the ground is tougher than one might expect, considering how essential air travel is to our business and personal lives in the modern world. But airlines large and small have gone belly up because they couldn’t land enough paying passengers. Radixx, a software firm in Orlando, puts some jet fuel in airline profits.
Ron Peri, founder and CEO of Radixx, tells us that building an advanced airline passenger service system is a complex endeavor that defeated several major players who spent hundreds of millions and years trying. “There have been a lot of attempts to build this type of software that failed,” says Peri.
Radixx itself only succeeded by doing it incrementally over many years, he says at a cost of about $50 million.
A myriad of problems have to be solved: chief among them, getting the airlines specifications and working with legacy software systems, but the whole thing is complex, Peri says. The air industry business model is in a rapid state of change. You must find a way to compete profitably in an environment where low cost structures and non-traditional business models are now the rule not the exception.
Presenting at SEVC
Radixx, spun out of a previous airline focused company in 1998, is among the 50 innovative firms presenting at the fifth annual Southeast Venture Conference in Atlanta March 2-3. And what a story Radixx has to tell.
“We have a variety of airline clients who will state emphatically that implementing Radixx Air made them profitable, more profitable, or kept them in business,” says Peri. Great Lakes Aviation, for instance, stated in a filing with the US Securities and Exchange Commission that Radixx was the reason for the company’s first profitable quarter.
Air Iceland made its first profit in 40 years of operations after installing Radixx software.
Another airline saw a 250 percent increase in bookings using the software. Go Air, which had never had more than 100,000 passengers in a month leaped to 147,000 the month it first used the product and moved to 250,000 a month.
“It’s had a tremendous impact,” Peri says. “It’s just a more effective and better way of selling.”
The Internet changed everything
The Internet changed everything for airline ticket sales just like it disrupted publishing and music sales and many other aspects of modern business. In the old days, Peri says, a travel agent would book you with the airline that gave them the best commission and you took what you got. Now, on the Internet, “Airline fares are obvious to everyone,” Peri notes.
To deal with that new transparency, which lets people find the cheapest fares quickly, airlines sell everything they can sell as services, from baggage fees to meals or better placement in line. That requires a software system that can handle constant adaptations.
Radixx has about 30 airline clients now and no two do things the same way, Peri says. “But we are at a point now where we have a product,” which he notes was far from easy to create. Now the company is looking for venture backing to help it build out its brand and sales channels.
Radixx Air charges on a transaction basis. It allows selling through any distribution channel, e-ticket or ticketless, legacy or modern.
“There have been many attempts to build this type of software that failed,” says Peri. “We’re kind of the little engine that shouldn’t have been able to but did, little by little.”
He says that if the company lands funding, the lessons it has learned creating its product give it some insight into what’s coming out of the clouds. “We could do some things along the lines of breakthroughs,” he says.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: Air Iceland, airline passenger service systems, FL, Go Air, Great Lakes Aviation, Orlando, Radixx, Ron Peri, SEC, SEVC, Southeast Venture Conference
Posted in Company Profile, Events, Florida, IT | Comments Off
Friday, February 4th, 2011
By Allan Maurer
Kabbage, (http://www.kabbage.com/) which just planted $6.65 million led by BlueRun Ventures in the bank, is a company with one of those innovative ideas that could not have happened at a better time. The company makes working capital advances via PayPal to qualified online sellers.
Marc Gorlin, chairman of Kabbage, at the 2010 Internet Summit in Raleigh, NC
“There is no faster way to raise working capital on the planet,” says Chairman Marc Gorlin. Out of Beta for a short time, Kabbage has doubled the number of clients it had previously.
It has been making advances of from $2,000 to $12,000 and is going to move up to advances of $25,000 to $40,000 over time, says Gorlin. “If they can get access to capital, they can truly grow their business.”
The alternative method of raising capital offers online sellers another option in one of the worst climates for obtaining small business credit from banks in history.
Kabbage co-founder and COO Kathryn Petralia on the motorized beer cooler the company won at a PayPal X developer conference
This Internet thing is just a fad
“Take a company like Zappos,” says Gorlin. “They were doing $50 million in revenue before they got their first credit line from a bank. Many local companies doing $5 million or $6 million can’t get credit. A company in Minnesota referred to us was selling hardware and had a run rate of $4 million a year from online sales. They went to a bank for money to expand. The bank told them this whole Internet thing is just a fad – and that was this year.”
While traditional bankers want to walk wooden floors and see actual customers, Gorlin points out that “There is actually a ton more data online.”
Using that data, Kabbage qualifies sellers in a matter of minutes from about 200 data points in PayPal and eBay – how long a store has been online, it’s seller rating (which indicates how well they treat their customers), PayPal charge backs, volume of sales and much more. Kabbage has made advances to companies selling everything from American Indian jewelry to model trains, plus size men’s clothing, odd sized men’s shoes, china, and collectibles. “It’s a diverse list,” says Gorlin.
The companies agree to paying back one-sixth of the advance each month via PayPal and can pre-pay with no penalty. Kabbage makes from 6 percent to 16 percent of the advanced amount in fees depending on the firm’s credit history and volume. Down the road, Gorlin sees the possibility of giving online sellers a “Kabbage score” based on its data and increasingly sophisticated analytics. It can, for instance, tell over time which data points may be most predictive of small business success online.
Robert Frohwein, CEO of Kabbage, has been CEO of LAVA Group Inc., an intellectual property investment bank, a founder and the managing partner of Sentry Law Group, and founder of MediaWheel
Hold it while we check your Kabbage score
Banks may eventually use the Kabbage score to open up their own loan coffers, Gorlin suggests. “We could be the means by which banks get more money to small businesses by automating the process for them,” Gorlin notes.
Data analysis Kabbage has done for its own customers shows that “Margins for online businesses are stout. A lot of them won’t sell things for less than a 100 percent margin, they are not paying rent on a store, they don’t have shelf space to fill or need people to talk to customers. They do have different fees on PayPal and eBay, but by and large, the customers we see are running high margin businesses.”
Founded in late 2008 by Gorlin, CEO Rob Frohwein, and Kathryn Petralia, COO, the company attracted high profile investors who include David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund, in addition to BlueRun. The company says the funding will let it expand its financing service beyond eBay merchants to marketplaces such as Amazon, Etsy, Overstock and so on.
Talking to Gorlin, you can tell he gets a kick out of helping small businesses while building his own. Kabbage itself still has a classic startup culture, says Gorlin, a serial entrepreneur who was a co-founder of Pretty Good Privacy (NYSE:MFE), Vertical One Corp. and the Lanta Technology Group.
Startup culture, he says, “Is something you can’t recreate in a big company. You work the number of hours you do to create something out of nothing and you have to burn off some steam.”
So, there are nerf guns. Oh yes, and there is the motorized beer cooler. Kabbage won it as the audience choice prize at a PayPal X developer conference in San Francisco. “I guess you could put something besides beer in it,” says Gorlin, “but I wouldn’t know why.”
On the heels of its funding, Kabbage has already selected larger new offices in Atlanta and will be hiring. It currently employs eight people and expects to hit 15 or so in the next 60 to 90 days. But if you’re going by, watch out for the nerf guns.
Reprinted from our sister publication, TechViewAtlanta.com
Tags: Atlanta, BlueRun Ventures, captial advances to online sellers, ebay, GA, Kabbage, Kathryn Petralia, Marc Gorlin, PayPal, Robert Frohwein
Posted in Columns, Company Profile, Georgia, Internet/New Media, Money | Comments Off
|
|
|
