socalTECH.com - SoCal TechNews - Thursday, September 16, 1999
Copyright (c) 1999 by Benjamin F. Kuo
ISSN: 1524-6736
http://www.socaltech.com
-- Special: Interview with Farhad Mohit, President & CEO, BizRate.com
-- Ticketmaster Online-CitySearch's Conn Talks
-- Investors Pay Idealab Fund High Premium
-- Net-based Entertainment On the Rise
-- Vitesse Sets 2-for-1 Split
-- THQ Releases Sinistar Sequel
-- Firstuse.com Launches New Site
-- Digital Insight Signs MIT Federal Credit Union
Upcoming Events http://www.socaltech.com/calendar/calendar.pl
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Special: Interview with Farhad Mohit, President & CEO, BizRate.com
----
It's been a few weeks since my last round of interviews, but in continuing
with my focus on innovative high tech entrepreneurs here in Southern
California, I interviewed Farhad Mohit, President and CEO and a foudner of
BizRate.com in Santa Monica.
BizRate.com, provides customer feedback to users on online vendors, and
recently signed a deal with Consumer Reports to offer their ratings
on Consumer Reports' web site. If you do any sort of online shopping, you
might have begun to notice their post-purchase surveys at online
retailers.
Farhad Mohit:
BK: How did Bizrate get started, and what prompted you to start the company?
FM: I was in business school in '95 when I first became exposed to the Internet
and immediately saw it as an incredible opportunity. Here was something
that was going to change the world, and I was in a great position to be a
part of this.
Why? Well, the net was going to fundementally change the world, but the
people that understood this (the techies) were all in the 18 - 25 range and
quite unsophisticated / uncaring about the ways of business. However, the
world that would be most effected by this change (and had the $$$ to invest
in this change) were those in the business world, dominated by 40+
businessmen (and women) without the faintest clue of what was about to hit
them or how to communicate with these young "tech-geeks."
What was needed was a liason. Someone who could bridge the gap and bring
the geeks and suits together to make something great happen.
Well here I was, a "techy geek" by undergrad training (Math, Computer
Science and Economics @ UCLA), and vocation (Systems Integration Consultant
-- a euphamism for programmer -- @ Andersen Consulting), getting the
training in the vernacular of business at Wharton, one of the better
business schools in the country.
I therefore saw myself as the ideal person to bridge this gap between the
techies and the suits.
All I had to do was figure out what concept to use. I bascially did just
this during my two years at Wharton. In fact, BizRate.com was my thesis
project for graduating with an MBA in Entrpreneurial Management. And, my
partner and co-founder, Henri Asseily, was a class-mate who worked on the
project with me at school.
BK: What's Bizrate's model for revenue, and where do you see the company
going in the next year or so?
FM: BizRate.com basically sits at the online point-of-sale (the receipt page of
1700 vendors to be precise), inviting every single customer to provide
feedback regarding their experience.
The information is used in two ways that generate revenues:
i) It is packaged and sold back to the merchants and others interested in
e-commerce research, as the best marketing research available. Afterall,
it is e-commerce research based on direct feedback from millions of online
buyers.
ii) It is presented back to the consumers in the form of BizRate.com
awebsite that is the ideal place to start your online shopping because it
allows you to confidently select vendors based on the experiences of
everyone who went before you. The revenue model for this site is manifold,
including cobranding of the ratings for third parties such as AOL, MSN,
Lycos, Go, etc, select sponsorships, and demand aggregation (coming in q2
2000).
BK: What difficulties, if any, did you find in getting the company started,
finding venture capital, and otherwise getting BizRate off the ground?
FM: When we were getting started VC money wasn't as available as it is today.
Also, our concept of buyer ratings was a little ahead of its time.
Consequently, we had to bootstrap for almost two years (June 96 - May 98)
before getting our first round of VC money.
Once we had engaged VCs in discussion, the hardest part of securing money
was getting them to actually submit a termsheet. This was accomplished by
getting multiple parties involved and letting each side know that there
were others interested and "moving fast."
BK: What kind of advice would you give aspiring entrepreneurs in trying to
start their own Internet-based startup?
FM: Most important of all: Do it! The hardest part is simply taking the
plunge.
My second advice is to leave yourself no back-up plan. This sounds
dangerous, but I firmly believe that it increases your odd of success on
two fronts: 1) By putting everything / risking everything, you will have
all the incentive in the world to make it work. When things don't go
exactly the way you plan them, you'll stick it out and find a way through.
2) When you hedge you are likely to be devoting some time to keeping your
hedge alive (i.e. the typical version of this is to keep your job and try
to be an "entrepreneur by night." Well, guess what: This most likely
won't work, because you are drained from your regular job and because you
are competing with thousands of people who have risked everything and are
working 24/7 on your idea!
Lastly: I would say that right now becoming an Internet entrepreneur isn't
even taking such a big risk. I mean, the worse thing that can happen is
that your business doesn't succeed right? Well, even in this dismal
outcome, more than likely you're left with a ton of Internet knowledge and
learning under your belt and are now in position to join another promising
Internet start-up!
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Ticketmaster Online-CitySearch's Conn Talks
----
Charles Conn, CEO of Ticketmaster Online-Citysearch, talks about his firm's
plans for launching their services in 40 more cities by next month, and
moves into food delivery, video, bill paying, and more--and keeping
competitors out.
http://www.news.com:80/Newsmakers/index.html?st.ne..fnav.nwsmkridx
Investors Pay Idealab Fund High Premium
----
According to the Red Herring, the latest venture round that Idealab
Capital Partners has round came at a high price to investors--up
to 30 percent carried interest on its new $350M fund, according to
the Herring's sources. Apparently, only 20 VC firms are able to command
such a premium on funds, including Kleiner Perkins Caufield & Byers,
Accel Partners and Benchmark Capital--and none as new as ICP.
http://www.herring.com:80/insider/1999/0915/vc-idealab.html
Net-based Entertainment On the Rise
----
Net-based entertainment is again on the rise, including Venice based
WireBreak Entertainment--Upside examines the business.
http://www.upside.com/texis/mvm/money/the_take?id=37d6df3d0g.
Vitesse Sets 2-for-1 Split
----
Vitesse Semiconductor, the Camarillo based IC manufacturer, has set a
2-for-1 split of its common stock.
http://biz.yahoo.com/rf/990915/98.html
THQ Releases Sinistar Sequel
----
Calabasas based THQ has released Sinistar: Unleashed, a follow on
interactive space combat title based on the original Sinistar. The
game takes the original elements of the game and transforms them into
a new 3D universe.
http://www.gamesmania.com:80/English/News/99/sep/0915b.htm
Firstuse.com Launches New Site
----
Firstuse.com launched a new version of its site designed to provide digital
fingerprinting for computer files. The Westlake Village based company
is hoping to help users strengthen intellectual property claims and help
resolve IP disputes by providing an online way to register and digitally
fingerprint any computer file, including business plans, scripts,
inventions, tax records, and more.
Homestore Launches Remodel Site
----
Thousand Oaks based Homestore.com launched another site in its portfolio
of home related sites. Remodel.com is focused on home improvement and
maintenance for both consumers and professionals.
Digital Insight Signs MIT Federal Credit Union
----
Banking software and service provider Digital Insight announced it
had signed the MIT Federal Credit Union. The Calabasas based company
provides software and services for banks who want to offer Internet
banking to customers without investing in their own development projects.
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Upcoming Events This Week
Full calendar at http://www.socaltech.com/calendar/calendar.pl
** Am I missing your event? Tell me about it! ben@socaltech.com
September 15-16, Los Angeles -- Softworld Manufacturing and Supply Chain
Expo. Expo and conference focused on manufacturing and supply chain
software and services. See http://www.softworld.com
September 16, Beverly Hills -- Los Angeles Technology Fast 50. Recognition
by Deloitte & Touche of the fastest growing technology companies in LA,
Riverside, Santa Barbara, San Bernardino and Ventura counties. Contact
Ginnie Smutko (213) 688-1854.
September 16, Westwood -- "Windows 2000 and Office 2000". California
Society CPAs Westside Technology Users Group. See
http://www.calcpaweb.org/la/wtug/
September 16, San Diego -- The Use of Virtual Reality Tools in Psychology
and The Science of Internet Behavior. Brenda K. Wiederhold, Mark D.
Wiederhold. San Deigo Chapter Association for Computing Machinery See
http://www.san.rr.com/acm/990916.html
September 16, Thousand Oaks -- "The World's Largest Parallel Processing
Program:Seti@home" Michael J. Ramey, PE, MCA Engineers. IEEE Buenaventura
Section. For more information contact m.ramey@ieee.org or 805-486-8881
September 18, Irvine -- LARTA's "Digital Epicenter: Mining Knowledge and Making
Deals" Technology transfer officials gather for a discussion of digital
technologies in development, how to access technologies developed in
research institutions, how deals are done, licensing technologies and
success stories. Contact Nicole Huntington at nhuntington@larta.org, or
call (213) 743-4164.
September 18, Santa Monica -- WebGrrls: Krav Maga Self Defense Class. See
http://www.ontargetdesign.com/wgla/
September 21, Los Angeles -- Zone Club meeting. Guests Sky Dayton and
Jake Winebaum, eCompanies. See http://www.zoneclub.com
September 21, San Diego -- San Diego Internet Roundtable: iLounge
Conference. See http://www.sdir.org/schedule.html
September 21, San Diego -- Microsoft Annual AITP Update. Association of
Internet Technology Professionals. See
http://www2.connectnet.com/aitp/next.html
September 21, San Diego -- "Visual Cafe" Steve Norton, SE Manager for
Symantec's Internet Tools. San Diego Java Users Group. Building,
deploying and debugging a distributed application using either RMI,
CORBA and/or EJB technologies. See http://jug.dtai.com/meetings.html/
September 22, Los Angeles - 1999 Capital Sources Conference,
American Electronics Association. See
http://www.aeanet.org/aeanet/Public/councils/LosAngelesCouncil/events.html
or call 310-563-1060 or email: renee_moran@aeanet.org
September 22, Los Angeles -- "From Aerospace Engineer to Entrepreneur."
John E. Lewis, PhD. , and Stephen A. Maas, Ph.D. IEEE Los Angeles Area
Consultants' Network. See http://laacn.org/index.htm
September 22, Culver City -- "e-Commerce: Strategic and
Tactical Implementation" Jerry Kalman of the Canaveral Group. California
Society of CPAs, LA Chapter. See http://www.calcpaweb.org/la/tech.html#A16
September 22, Los Angeles -- Web Fest '99. Venice Interactive Community.
Sponsor presentations and table-top demos, a mini job-fest, networking,
entertainment, food and drink. See http://www.veniceinteractive.com or
call (310) 452-2088.
September 23, Pasadena -- Transportation for the New Millennium: Clean
Vehicles and Mobility Services - CALSTART Advanced Transportation
Industry Conference. For more information contact: Sue Nelson,
WestStart-CALSTART 626/744-5680, E-mail: snelson@calstart.org
September 23-24, Los Angeles -- Los Angeles Times Small Business
Strategies Conference. Speakers include Alfred Mann, Minimed; Jeffrey
Green, Ari Engelberg and Jim McDermott, of Stamps.com; Sky Dayton,
Earthlink Network; David Bohnett, founder, GeoCities. See
http://www.latimes.com/sbsc
September 23, Los Angeles -- Tech Talk Live - A Series on High
Technology. Jon Goodman, EC2 With Panelists: David Hankin, Digital Coast
Roundtable, Rohit Shukla, LARTA (Los Angeles Regional Technology
Alliance) See http://www.ec2.edu/events/townhall.html
September 23, Irvine -- "How to Attract and Secure Angel Investors" Tech
Coast Venture Network. Panelists include David W. Berkus
Berkus Technology Ventures, Webb Castor, Jack Bunis Bunis & Associates,
and William C. Maurer, Romac Executive Solutions. See
http://www.tcvn.org/forums.htm
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Welcome to our newest sponsor!
Brobeck Phleger & Harrison LLP (www.brobeck.com)
Also, thanks to our continued sponsors:
Koffler Ventures (www.kofflerventures.com)
Deloitte & Touche (www.us.deloitte.com)
Human Capital Group (email@humancapitalgroup.com)
Two Roads Professional Resources (www.2roads.com)
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