This morning, Los Angeles-based CircleUp (www.circleup.com) is launching the firm's social communications service at the DEMO 2007 conference. CEO John Payne, who has served at CEO of Stamps.com, Preventsys, and other firms, spoke with us earlier this week about the firm and its new service. socalTECH's Ben Kuo spoke with John to learn about the service and the background on the company.
John Payne: CircleUp is a social communications service, that turbocharges email and instant messaging, so that when you interact or communicate with online/offline communities, it allows you to interact with them. Instead of getting 50 emails from them, you get a single consolidated result, consolidated and organized as well. If you take an example--you are the president of a ski club and you say who can drive at the big trip to Lake Tahoe, what you get is this barrage of emails and instant messaging. So what we've done is built a web service, where we don't send emails to users directly, but we facilitate one member of a community sending emails and IMs to other members of the community, and then we act as a web service in the middle that aggregates the information, provides a result, and makes it easy for everyone to use and share what comes out of it. And the primary purpose is, information gathering---a huge activity, millions and millions of transactions every day in groups--and also collaboration, and outright decision making.
How is this different from online invitation companies like Evite?
John Payne: Well one way to think of it is sort of like a totally generalized Evite. It's taking some of the good things that happen when you use Evite and allow you to apply them to everything else that happens in your life. Whether it's getting drivers together, or whether it's figuring out who can volunteer for the American Cancer Society dinner, what we do is provide a technology which we call Answer Patterns to allow you to apply a little bit of structure to communications. So instead of getting back a big string of emails you have to parse through, you get back for example, a table, which tells you that between 6-8pm at night of the fundraiser, I've got these people volunteering for tickets, these people doing parking, and so on and forth. So actually by just adding a little bit of structure to an activity, it makes it possible to add a lot of value on the back end. First, you don't have to open 40 emails, second you don't have to parse through them, and third you have an organized group of results useful to everybody, rather than just being in your email.
Where'd the company come from?
John Payne: The co-founders are me--I'm the CEO--and Doug Tung. The company was founded in March of 2006. We were in sort of heavy engineering for the couple of months following that, and then in November of 2006, we started a stealth alpha, when we put a few thousand of customer on the service, and where we really learned a whole ton of what people wanted. We're now moving into a public alpha, which we expect to be pretty widespread..
Most of the readers are probably familiar with your experience at Stamps.com, can you talk a little bit about how you decided to start this company?
John Payne: I've been active all my life in all kinds of online and offline communities, so I've had a very keen awareness of how people use email and now instant messaging. If can be incredibly productive, but you can hit a wall and it's just not that useful anymore. If you look at my background, this is my eighth startup, and the fourth company that I've launched at the DEMO conference. All of the companies have been a little different. The last four or five have been consumer facing, trying to solve problems that a very large group of people have, and where having the Internet is half the solution, and having really key application is the other half of the solution.
How is the company funded?
John Payne: It's privately funded so far. We've had a seed funding that has been largely technology industry individuals participating.
What's the business model behind the site--is this something that is advertising driven, or is this a subscription service?
John Payne: The first year it will be advertising driven. When people do information gathering, they often do it with a purpose, and we believe that our advertising is highly contextual, and as such is on the higher end of the revenue curve when it comes to advertising. As we grow, what our users have already told us, and there are people who use CircleUp--such as consumers--say, the soccer coach, who don't mind that there might be ads there about Cinderella III in the stuff you use. But those same people might also want to use it for business uses, so at the end of 2007 you'll be able to pay a fee and A) have the ads go away, B) get Salesforce.com integration, and C) get better Blackberry integration and D) get better Exchange integration.
You had mentioned this is your eighth startup. You've been though several successful firms, why another startup?
John Payne: Well, I've been doing this since I was twenty years old, and that was not last week. I basically love it, it's what I do. If you build a company to just make money, that's not a very compelling and passionate way to live your life. I think these companies are very interesting. I've historically been a way pre-revenue to $30M in sales guy, and I'm not just interested in the process once it's past that point. I like the early stage, building it and figuring it out, and the market out.
You've seen lots of successful startups, what's your theory on how you make it?
John Payne: I don't know if I have a lot of magic on that. The basic things are the same things the VCs are looking for, which are the things that apply to the entrepreneurs. Be in a good market, be at the right timing of he market, and be sure that the offering that you have conforms to what your customers need, versus what the technology you have is. I see so many of these technology companies where it's technology trying to become a product. They have the old Japanese saying, where if the tool you have is a hammer, every problem looks like a nail. I would say making sure your solution really maps to a serious customer pain point is the key.
Speaking of that, it would seem that the barriers to entry on this product are low, how are you dealing with that?
John Payne: We're not just building a small feature which is an extension of something else. This is an entire end-to-end system, that has a whole bunch of technology. It has a messaging hub today that extends across email, and Yahoo and AOL instant messaging, and shortly will cover all the public instant messaging outfits. That same hub will actually extend to the mobile communications side. There's a whole bunch of technology around that, and technology around our widget collection architecture. Most widgets today are distribution endpoints, a way that someone can take something from their site and offer distribution somewhere else. We're going to turn that model on its head, and use that widget for collection endpoints.
Can you explain what you mean by "collection endpoint"?
John Payne: Most widgets act like a scoreboard--providing the status of a game, or access to music. Almost always, a remote site has made available a little view of their content, which you can access. On the other hand, we use widgets in a different way. We use widgets in focusing a user on a specific task, and that goes back and goes back as part of a community result.
So it sounds you're going to allow other people to add information directly to the system from their web pages?
Yes, absolutely, we've already got integrations of our "what's your question" toolbar"--a way of adding questions to our system--from partner pages. You'll also be able to ask questions in our system from Microsoft Outlook, from a desktop widget embedded on your desktop, and we also expose your question feed as an RSS feed, so any place you view RSS, whether that's a desktop widget or otherwise, you'll be able to monitor progress of your information gathering, without going to our destination site.