The ab|inventio Gazette

One of our early investors was happy enough with what we are doing that he sextupled his investment in the abInventio fund. Thanks!

David Thomson, an intense former technology executive and management consultant, has spent the past three years figuring out exactly what it takes for a startup company to reach that magic revenue threshold of a billion dollars. He lays out his findings in a new book called Blueprint to a Billion (for more information, see blueprinttoabillion.com).

After interviewing dozens of executives at billion-dollar firms, Thomson boiled down their management practices to what he calls the Seven Essentials.

The key: Each Blueprint company operated in a market big enough and fast growing enough to support at least one billion-dollar firm. Thomson doesn’t tell you how to find that killer idea, although he does suggest where the next set of billion-dollar opportunities in the U.S. might lie. Among his answers: Our increasingly harried society is likely to embrace any time-saving product or service. A bet on QLess, perhaps? On 1ofthese’s ability to save buyers and sellers time matching with each other? Or on the faster search experience provided by Whozat or REPcloud? Or on the faster marketing answers provided by PREPROVE?

Some of the essentials identified by Thomson are strategic: Create a killer value proposition. Some are operational: Manage for positive cash flow from the start. And some involve leadership: Hire a second-in-command who can take care of the day-to-day while you think big picture. (ab inventio is hiring! COO candidates invited to apply.)

It has long been a business school staple that successful companies sell emotional benefits, not just products. (QLess can extend your productive life by 2-3 years) Yet few entrepreneurs can explain why their business proposition is any better than the competition’s. Not so with our Blueprint companies.

Most Blueprint companies operate in markets large enough to accommodate several new billion-dollar businesses.

In their early days Blueprint companies attracted what Thomson calls a “marquee customer,” whose high profile and reputation opened doors to new markets. Landing that whale requires more than just salesmanship, however: The trick is to find one who effectively takes you on as a partner to help transform your organization. Says Thomson: “You need to find a client who is willing to take risks and innovate with you on your journey.” A customer like Fox or Korn Ferry?

Thomson found that Blueprint companies tend to finance their early growth from operations (the classic example is eBay, which was profitable from nearly its first day in business). There are exceptions, notably in industries such as biotech and telecommunications that require large upfront capital investments to get a business off the ground. But most Blueprint companies are the exact opposite of all those tech startups that flamed out back in the bubble days. “The customers finance the business,” says VC McNamee. “There are just too many people who believe that the path to success is, Get a pile of press, then get a pile of venture capital money, and then get a pile of customers. That’s exactly backwards.”

Corollary: Blueprint companies get extraordinary value from their boards. Most startups populate their boards with insiders or with investors who want to keep an eye on their money. But because Blueprint companies tend to finance their own growth, they are able to stack their boards with successful CEOs and industry experts who offer deep experience and contacts, help bring in business, and give shrewd advice.

Summarized from an article on CNN Money by Richard McGill Murphy.

Our team converged on Burbank last night from our offices in Altadena, Burbank, San Diego, San Jose and New York for a night of Marzia’s famous Italian pasta, Jim’s famous burgers, games and plenty of conversation. Seeing people voluntarily drive and fly for hours just to spend a few hours with their teammates is very encouraging, and says a lot about the team we’re building at ab|inventio.

ab|inventio is growing, and hiring!

We are looking for:

* Search Engine Marketing/PPC Specialist. Whether you are an SEM expert already or looking to become one, The SEM Experts is looking for smart and motivated people with a desire to work with industry leaders and help some of the world’s best products reach more customers.

* Sales Guru. Our companies have innovative products unlike any in the industry, and are young enough that the whole marketplace is still open. It doesn’t get any better for a savvy sales guru to start and grow a winning team!

* Operations Meister. Are you an expert at getting things done? Capable of keeping a dozen plates up in the air? Enjoy wearing many hats? Have experience keeping a business running? We want you!

* Business Development GrandMaster. Can you ideate and strike strategic partnerships to drive revenues? Are you well connected or really persuasive? Do you have what it takes to put great products in the hands of millions of users? Come talk to us!

* Website Designer. Do you have experience building websites that rock? Do you know how to engage a visitor? Are you an entrepreneur at heart? Come show us!

* Software Engineer. Do you speak AJAX in your dreams? Code in your pajamas? Wrote computer games when you were 9? Like to make intelligent machines for the fun of it? Enjoy the feeling of shipping a product? You may belong here.

* CEO. As our companies mature, we look for world-class leadership to take them out of the crib. If you have what it takes to nurture a market leader, we want to hear from you.

Inquire within by emailing careers { at } abinventio.com .

eBay Live 2007, the biggest trade show in the eBay ecosystem, started on Thursday morning. 1ofthese, an ab|inventio company that can convert every bidder into a winner/buyer by finding equivalent items for losing bidders, had a booth to introduce its services to big eBay sellers. It was the night before the show, and our booth sign had not been delivered. Our software still had a critical bug. Our impact movie had not been received. Our company T-shirts had not been received, and the girl who was supposed to wear one of them had not confirmed her presence. And the FEDEX package with the mind-reading headsets that we would use for our contest, prizing the contestant who got the highest attention score when concentrating on “I want more sales” was late.

But we did not give up, and thanks to diligent work by Susanne Sandsberg, Umesh Lalwani, Kartik Sehgal, Harender Kumar and team (and the fact that the Sun never sets on the ab|inventio empire), by the following morning, every one of those had been solved. With Mike Yudin (whose assistance was invaluable) and I manning our booth, we went on to collect hundreds of leads from eBay sellers interested in using our services, with many of them signing up right there on the spot. Prospective customers told us such things as “It’s a no-brainer to sign up for this!”, “This is a great idea!” (repeatedly) and “This is much better than eBay’s method”. We received visits by print and radio journalists, by an analyst intent on writing about us, and repeated visits by eBay executives, including Rob Cross, Sr. Manager of the Developers Program, and the top gun at Prostores, an eBay company which, in his words, has little to do with 1ofthese (eBay wouldn’t be spying on us via their companies, would they now?), . The keynote speech by eBay’s President North-America focused on eBay’s intent to increase “windorphins”, a term they recently coined for the feeling of winning an auction on eBay, which was practically an ad for us, given that 1ofthese is designed to help convert every bidder into a winner. We had a visit by a big potential bus dev partner, and by people intent on distributing our software in Europe. We had several visits by eBay educators who teach and train other eBay sellers. We had visits by Titanium sellers (the top of eBay’s tiers of sellers). And we had lots of useful feedback for future product development. I even got a chance to briefly meet Meg Whitman, eBay’s CEO. In sum, it was a thoroughly successful debut show. All with an investment in the smallest booth size available.

In the meantime, the Whozat team made several exciting improvements: a new UI, improved relevance, new interfaces to allow for comparisons of search quality, and two new internal UIs to test relevance improvements.

The SEM Experts grew its client base again.

And we came up with several new inventions for times to come.

All this in just a few days. Which brings me to how you can help. We are looking for a sales person and/or a biz dev. guru for QLess’s several verticals (restaurants, theme parks, hotel/casinos, supermarkets and retail, clinics and pharmacies) as well as one for Whozat HR and another to sell our Community-powered Corporate News Site to Fortune 500 companies who like to stay abreast of what their employees are reading and talking about. And if we find the right person, we may hire a Chief Revenue Officer as well for ab|inventio –someone with the experience to strike strategic partnerships and drive revenue across all our daughter companies. Referrals of exceptional people appreciated. And as always, we are always thankful for customer referrals, or for a word of advice.

We have also received investments by Assigncorp and Tom Mitchell, of Heidrick and Struggles fame and the co-founder of True Data Partners and several other successful ventures.

Thanks for your ongoing support. Thanks for helping us invent a better future.

Alex

The time has come for ab|inventio’s blog. We have too much to be excited about not to share.

Ø First and foremost, the best news has been the outstanding quality of the people we’ve been able to attract, which is both a testament to our incipient work and its best guarantee. In order of appearance:

o Jon Malmaud was courted by Earthlink, Adapt and the big financial powerhouses, yet he chose to be a risk-taker and start up REPcloud, the world’s first serious reputation engine.

o Dr. Marzia Polito was wooed by Yahoo after she left Intel but she chose to start Whozat instead.

o Ted DiSilvestre brings more than 25 years of software development and integration experience, from Director of Developer Technologies at Adobe to CTO of Conscium, and has already contributed to three different ab|inventio companies.

o Tim McCune, of Adapt and Yahoo fame, could be doing anything he wants but chose to lead QLess to launch in record time.

o Kirk House left his stable job with a cushy salary and has been racing at astounding speed to develop the first news site that I will actually read, because it is personalized for each and every person and adapts news to where in addition to who.

o Dr. Demetri Spanos, of Caltech, Google and Adapt fame, declined offers by Google and Spock, and although most of his time is still taken up by Adapt, has already left his imprint on Whozat.

o Dr. Alex Holub will be joining us this summer to use his expertise in visual recognition and learning to further improve Whozat.

o Mike Yudin brings 12+ years of engineering and entrepreneurial experience in the Internet business, from the prestigious Weizmann Institute to Principal Engineer at AOL to Partner at Scope Aware.

o Or Yogev, from Caltech, brings his experience in evolutionary design and unbridled enthusiasm.

o Doctoral candidates Ling Shi and Stephen Becker, from Caltech, were selected out of many qualified applicants (we had 24X our usual daily traffic when our job posting hit Caltech, and we got tons of qualified applicants) for summer internships. Every one of our offers indicated that we were their first choice and accepted the job.

Ø Second, we are very fortunate to have gathered the beginnings of a stellar advisory board. We are just beginning to constitute it, but it now includes:

o Brad Ball, partner at the PR agency Moroch, formerly President of Domestic Corporate Marketing at Warner Bros. and SVP and CMO for McDonald’s domestic business.

o Dr. Robert H. Fisher, whose client roster in leadership development has included Accenture, Charles Schwab, Chevron, Intuit, Kaiser Permanente, Silicon Graphics, Salesforce.com, Sun Microsystems, United Airlines, and Wells Fargo, among many others.

o Alex Moulle-Berteaux, VP of Marketing at Rockstar Games, formerly World Group Account Director for Apple at TBWA, where he led the development of worldwide marketing campaigns for Mac, iPod, iTunes and iPhone.

o Gitta Salomon, Principal, Swim Interaction Design Studio, formerly Worldwide Director of Interaction Design at IDEO Product Development and before that with Apple and the MIT Media Lab.

In addition to these advisors, our brain trust includes other heavyweights who have lent us their experience in a more casual way: Bob O’Rourke, VP of Public Relations at Caltech, Craig Johnson, Founder of Venture Law Group and Co-founder of Financial Engines and C2C and a Director of Adapt; Jeff Saper, Vice-Chairman of Wilson Sonsini Goodrich Rosati; Barry Carr, Founding Partner of Carr & Ferrell, Charlene Vaugh, CEO of The Algonquin Group, and Bob Yorio, co-chairman of the Litigation Practice Group of Carr & Ferrell; among others. And of course, our counsel Mr. Jeff Suto, our IP team, headed by Fred Farina of Caltech and Sandro Steinfl and Brian Cash of Ladas & Parry, and our tax and accounting expert, Jim Walters, Chairman of Kellogg & Andelson, have been invaluable. And Jerry Houser and Will Burrell of Caltech’s Career Development Center have been essential to our recruiting efforts, too.

Ø Third, we have made tremendous progress with several of our products in a very short time:

o QLess, our solution to waiting in line and customer loyalty data collection service, is ready in all of 3 UI formats already: touchtone dialing, text messaging and Instant messaging. A WWW UI is on its way, too. Read more about it at www.waitinginlinesucks.com and join our grassroots campaign to eliminate standing in line.

o Whozat, The People Search Engine, has gone into a private beta, and the statistics show that people keep coming back to use it every day! It has already helped one user discover a cousin she did not know existed, and revealed the most juicy tidbits about some of you.

o REPcloud, our reputation engine, although awaiting the development of an attractive UI, has already shown the value of its algorithms by showing that some of our team-members to be among the most reputable people in the business.

Ø Fourth, we have received our first external recognition: QLess was selected finalist for the prestigious Techcrunch Supernova Connected Innovators prize for promising emerging technologies awarded by Michael Arrington and Wharton School Professor Kevin Werbach.

Ø Fifth, even in this very early period, we have attracted some first-rate clients, including Korn Ferry International, CinemaNow, Assigncorp and others. In fact, our search engine marketing company is already profitable!Ø Sixth, two of our upcoming products, our Media Recommendation Engine and our Behavioral Messaging Testing and Brand Power Metering, have signed customers before we even launched.But it’s still early days, and many challenges and a lot of hard work remain ahead.

Some of you ask how you can help. Here are a few ways:

Ø If you know an establishment that has long lines, refer them to us and we will set up QLess for them. QLess increases customer satisfaction by letting patrons roam free while they wait, increases customer spend by freeing people from standing to spending, and provides invaluable data on customer return rates by day of week, length of wait, time of day, and more. And QLess Basic is free! www.QLess.com

Ø If you know an HR professional who could use Whozat, our People Search Engine, to avoid embarrassing themselves by introducing a candidate with an embarrassing online presence or simply learn more about their job candidates, please let us provide them with a free trial of Whozat HR.

Ø If you know someone who could use help with Search Engine Marketing, please refer them to us. www.TheSEMExperts.com

Ø If you know marketers or agencies, we’d love to run by them two new products we’re developing to help them measure branding power and test messaging in a way that is more accurate, much faster and more cost-effective than the ways it’s been done to date. Brochures available upon request.

Ø And, as always, unsolicited advice is always welcome.With warmest regards,Alex