the inside story

Inside Starbox Systems, Inc.

A simple, effective product with great margins.

Following i-drive, I focused on ways Internet technology could dramatically change small and medium sized retailers. As the market was still startup-unfriendly, I pulled one page from a 70 page plan I had written with the intent to fund the company myself. The page was titled "Rate It", and was one of my favorite "no brainer" ideas.

The first obstacle was to build a prototype unit. I hired a small, but talented engineering firm and commissioned them to hand build five units I could use to evangelize to potential customers. During this process, I decided I needed partners. So I called my former VP of Finance from i-drive and college friend, Gautam Srivastava, to help me raise money, handle legal and corporate issues and do the books, all of which I found massively distracting. After the prototypes were done, Gautam and I called a former mentor of mine at i-drive, Robert Miller to join us. Robert had over 15 years of product experience, was a great sales man, knew how to get things manufactured in China, and knew the difference between PC and ABS plastics.

One year later, we have signed Hollywood Video to a $800,000 deal (that balloons to over $3mm if the product performs. The production product was deisgned by an award winning firm from Boston and manufactured by a leading firm in China. The company is still just the three of us, and will in its fist 18 months eclipse the total sales of my prior startup, i-drive, with its 115 employees and $30mm+ of funding.

More about my reference, Robert Miller.

I met Robert through one of my angel investors and founders at i-drive. Robert has unlimited energy and I used him as a mentor and coach at i-drive. We had decided at that time that we wanted to work together some day on an idea. Robert is an amazing sales man and after years at Mattel, he began coming up with his own products and selling them...even on channels like QVC.

Inside Venture Consulting

Helping Struggling Startups

After helping i-drive battle the down market and raising $13 million in the post-April 2000 Nasdaq crash, investors and companies were anxious for help. Though I helped more than 5 companies rewrite business plans and investor presentations, I focused my work with Sony Music's New Media Ventures group, 550 DMV. I knew there was great potential to leverage Sony's brand and its portfolio of startups were a mess. Working with DMV's president, Fred Ehrlich, I started an exit analysis of some of their struggling startups.

I did the most work for a startup called Kick.com. In the end, after working with the founders to rewrite the business plan and investor presentation, Kick did survive. A different group acquired Kick and the team still operates within the Sony BME group building sophisticated web apps for MySony and Sony Online.

More about my reference, Matthew Skyrm.

Matthew was the CEO and founder of Kick.com, a Sony-funded startup. Today he works for Sony BSE, who acquired Kick.

Inside NIC

Larry Ellison's Internet computer startup.

I was brought in by Gina Smith, the CEO of NIC, to run business development. In the end I ran both marketing and business development. The first chore at NIC was to clean up its business development by closing, cancelling and stopping most the deals it had done or was considering. Startups are notoriously hungry to do business development deals, probably because in the absence of sales, bus dev deals feel like progress. But most deals are typically bad, for three reasons: First, startups do deals with other startups, both too weak and under-resourced to do anything effective. Second, bus dev deals are mostly distracting and resource heavy in the first phase. So rather than concentrating on developing the core of the product or service, startups are customizing and working on deal specific tweaks. Lastly, startups have little barginning power, so they sign deals that are short on revenue and push revenue to the end of the deal.

With most of the deals off my desk, I could concentrate on the few deals that were critical to the company: large channel development deals, software bundling deals (the NIC needed relevance) and deals with big hardware guys (Epson, Sun, etc) that filled out the gaps in our product (printing and servers).

The much more difficult task was to refocus the company's marketing efforts. Like other Internet computer companies, NIC was pulled-in by the allure of the consumer market. The problem is, consumers are notoriously late adopters of new technology and take money to reach. With less than $10k a month in the marketing budget, it was unrealistic. So I focused the company on two markets where the product had immediate relevance: education and enterprise.

In the education market, we solved two problems, cost and complexity. The key to most schools is the ability to run Flash-based online apps and browse the Internet. The NIC did both well. Plus, it was a market where we had been successful. Larry Ellison's personal charity had donated 60,000 NICs to schools, so we had a lot of experience and momentum. To add depth to our offering, we offered a complete online learning suite bundle with the NIC for $99/year/machine. Our efforts worked and we began negotiating bundle deals with our education customers with margins 2-3x our previous deals.The company closed before any of the deals could close, unfortunately.

The goal in the enterprise market was to appeal to IT's pocketbook. All CIO's know that for many employees, giving them a $2000 Windows machine was a reciepe for disaster. So we targeted those enterprises that could benefit from substituting the NIC in for 1-5% of their PC purchases. Our total cost of ownership (TCO) was just a fraction of a Windows machine and we began to preach our message to the Fortune 1000.

Unfortunately, Larry Ellison lost patience with the spiraling tech market before we had a chance to see if our Enterprise effort would be successful, but we had signed a few Fortune 1000 to test the NIC weeks before closing.

More about my reference, Gina Smith.

Gina has a decorated career as a radio host, reporter for Good Morning America and 20/20, author, tech CEO and tech journalist.

Inside i-drive

From an idea to an industry leader and back.

At the beginning of 1996, while I was doing Bonforte Consulting and living in Atlanta, I began starting up small Internet companies. In the end of 1997, I started up a small company hosting UNIX shell accounts with 10 MB called Shellserver. The credit card fraud rate was too high to keep going, but the concept intrigued me. As a consultant, I had started to use shell accounts to access files while working in client offices. I had the idea for i-drive as I sat explaining Shellserver to my accountant (who was interested why all the money I made in consulting was quickly spent in Shellserver).

I began flying to San Francisco for short visits knowing Atlanta was not the place for a tech startup. I searched for engineers to help develop the idea and invstors to fund it. I would sleep on my sister's couch, who was a teacher in the bay area, and meet with anyone I could during the days. Six months later, I closed the consulting firm and moved to San Francisco to make i-drive happen. I hired a sullen but talented engineer to build a prototype of the product. He later became the CTO. I found an amazing angel investor on one of the plane rides to San Francisco. Rich MacAlmon had started a software company 10 years prior and made millions taking the company public.

The rest of i-drive's accomplishments from this idea in 1997 to a company with 8mm registered users, over $30 million in venture funding, 110 employees and a leader in the industry is well documented on the resume page and in the press clippings.

I agreed with my investors to take over the Chairman role and bring on a "seasoned" manager in 2000, a mistake with hindsight for me and the company, but given the state of the market after the 2000 crash, not much could have been done to do anything but perhaps just survive. Since the role of Chairman was mostly ceremonial, I left even that in 2001 to concentrate on new ideas (Starbox and others), travel and think. This was, by no means, a mistake in hindsight.

There is certainly more dirt and inside story behind i-drive, but you will have to read it in a book someday. ;)

More about my reference, Rich MacAlmon.

Rich is the founder of Indus International (Nasdaq: INDS), a co-founder of i-drive and the founder or MarbleLogic.

Inside Bonforte Consulting

Big Money Helping the Big Companies.

After almost 3 years working for Verity Consulting, I left and started Bonforte Consulting. I started with two clients I took from Verity, Equifax and Emory University. From the day I started my first project, I was billable every day afterwards for three years. At the end of my first two years, I was billing $225/hr and had two consultants working for me. My clients included Marathon Oil, Cinergy, Emory University and Equifax. I did a number of sub-contract deals for CSC consulting as I brought big IT support experience.

When I moved to Europe in May 2002, I started consulting again. In Switzerland I completed small projects for one of my i-drive investors, Partners Group and bigger projects for First Tuesday Zurich and its clients: Swisscom, Canton of Zurich, Cisco, IBM, Microsoft and others. I have become a specialist in building profitable consortium-based products and in building quick-win projects (the typical consulting model are long, drawn out projects taking quarters or years rather than months or even weeks.

More about my reference, George Westin.

George is the now-retired VP of IT for Cinergy, a large mid-western utility. He was my largest consulting client. I worked closely with George on many successful projects for over 18 months.

Inside Verity Consulting

Learning the Ropes in Consulting

When I was hired at Verity, it was truly a botique. The founder was a Harvard MBA that had built a practice consulting mostly to PG&E. I was hired as a junior consulting, doing the research and writing the reports on as many projects as I could. As I got there, the firm had started a small IT support project. Within six months I ran that project and took it from 18 clients to over 225 clients over the next two years.

As I handled more and more work I had the opportunity to sell work too. When I arrived at the firm, the president of the company sold 85% of the work. After two and half years, I was selling 85% of the work. I sold so much work, we brought on five new consultants to handle the work. Following the successful IT support project, I launched two call center projects and took over a global strategic standardization project.

After my second year, the president moved me to a commission-based pay structure. 70% of my compensation came from waht I sold and what I managed. With six months, my salary was well over $100,000, too high he felt for a 23 year old.

I had just begun selling customized projects to Emory University and Equifax with great margins and as I was closing the deals, he called me into tell me that he was going to cut my commission rates in half. I disagreed and we parted ways. I took the two new customers, Emory and Equifax, and started my own firm. In the end, the president refused to pay my last commission check, over $20,000. As the work I took from him amounted to over $100,000, I didn't fight it, but the "breakup" was difficult.

To the president's credit, he was a remarkably smart guy and he taught me many of the base consulting and presentation skills that have served me well over the years. He benefit from my work, too. 18 months after I left, Meta Group acquired his firm to control the IP of the two projects I built and managed, the IT Support and Call Center work.

More about my reference, Tom Cramer

Tom was a fellow consultant at Verity. I later hired him away to join Bonforte Consulting and again at i-drive. Today he is a director within the IT group at Stanford University.

Inside UCLA

Navigating the System.

UCLA hadn't been my first choice. I had wanted Stanford or Dartmouth, but got into neither, so I chose UCLA because they offered me a scholarship and it was my responsibility to personaly pay for college. However, many things about UCLA fit me well. First of all, as are most giant state schools, UCLA was built on systems and rules. For most students, this beauracracy makes it hard to graduate in five years if at all. I, however, excell in large structured environments. The more the structure, the easier I find it to get around the system. While the average UCLA student graduates in five and a half years, I graduated in just three. I left traditional and impacted majors like Economics (UCLA's answer to a business major) and chose Classical Civilizations.

Classical Civilizations had just 40 students in the department, compared with Economics 4000+. I had the opportunity to take two classes where I was the only student, very atypical for UCLA (I had an economics course with just under 1000 students). Also, Classics was interesting and hit areas I felt I was weak. I wanted to learn to write, think critically and to communicate. I wanted to study languages and build a true liberal education (more typical of the Ivy League schools). And finally, because the department was small, it gave me the interaction with the professors I wanted and the flexibility to graduate early, for though I enjoyed school, what I really wanted was to get out into the business world.

More about my reference, Professor Robert Gurval.

Professor Gurval is the head of the Classic's department. He was my instructor for three separate courses at UCLA and also my department advisor.