Tag: Minnesota (Page 9 of 11)

Another Minnesota-founded Internet startup, Wize.com, has scored major venture funding. It’s the fourth such significant Series A round I’ve reported for startups in this category in my adopted home state in just the past eight months. Wize announced Monday it has received $4 million from top-tier firms Mayfield Fund and Bessemer Venture Partners. So it’s great news again for Minnesota, home to so many excellent, experienced entrepreneurs and developers.

In this post, I interview founder and chairman Doug Baker, whom I met in December, to learn more about how his firm’s funding came about. It’s a wonderful story. Interesting to note, however, that the firm now states its headquarters are in the Bay Area (where its new CEO is located), yet the Minnesota office and its people remain here. One of those people I know is Lee Zukor, Chief Customer Experience Officer, who hails from Best Buy, where I also spent some time. But, first, more about Wize and its technology.

More Than a Million Reviews Served
This firm has been busy! It’s already consolidated some 1,052,255 expert and consumer reviews on more than 17,000 products in eight categories. And more are of course on the way. It’s all based on what Wize calls the “collective wisdom from across the Internet. Can you say consumer-generated content and the wisdom of the crowd? Its Wize Rank technology distills this collective knowledge into a single, simple number that’s easy to understand. It’s all propietary, of course, but the firm says, interestingly, that “it’s not complicated” and “it works, consistently.” Meaning that it helps you find great products.

Wize says its technology does not play favorites. Impartiality is obviously critical in a service like this. “Manufacturers and advertisers can’t buy a higher rating. The only thing that can improve a Wize Rank is more positive data collected from independent sources,” the firm states. The Wize Rank scale ranks products from 0 to 100, with 100 being the highest score. But top-ranked products aren’t always the best for you, the firm says. Depending on your personal needs, you may find a lower-ranked product that’s a better fit. The important thing, Wize points out, is that reading what the reviewers are saying can help you make the right purchasing decision.

Some products on Wize.com don’t yet have a rank. The company says it is constantly collecting trustworthy expert and consumer product reviews from thousands of internet sources. “When enough consumer product reviews are available, each product’s Wize Rank is calculated and presented. Until that time, we display all the information and reviews that are available to us without a Wize Rank. This lets you see what products are new and gives you easy access to the most up-to-date reviews and information on the web.”

A nice feature on Wize.com is one that lets you track the progress of a new product simply by saving that product to your My Research page. Then you just check back at your convenience, anytime.

A Q&A With Doug Baker, Founder and Chairman
Doug is another great example of a successful Minnesota serial entrepreneur. In 1999, he founded Private Accounts, an online marketplace of money managers that was acquired by ETRADE in 2000. More recently, he served as the original chairman of Airforce Nutrisoda, which was recently acquired by Pepsi Americas. In 2005, Doug founded Wize, where he continues to be active in the day-to-day operations and is chairman of the company’s board.

Doug graciously agreed to let me interview him for my blog. I told him I wanted to focus on the topic of funding and what the whole experience was like for him, because I knew other Minnesota entrepreneurs would find his story valuable.

Tech-Surf-Blog: What’s been the timeline of Wize’s history and how long did this Series A funding process take you? Please also tell us about any previous private or angel funding.

Doug Baker: Wize took Angel funding to get started, and we launched in beta in August 2006. Obviously, timing is critical and varies by company, market, product, etc. We were thrilled that Wize was approached by several VC firms almost immediately after our launch — it had long been our plan to capitalize the company with top VC firms.

Tech-Surf-Blog: How did you end up connecting with these two very well-respected VC firms? And what was the whole experience like, making the VC rounds?

Doug Baker: We couldn’t have been more pleased that the first two firms that contacted us were Mayfield and Bessemer. But my experience — and my lawyer — told me that we needed to “make the rounds” before committing to any firm. Our new CEO, Tom Patterson, came out to Minneapolis right away (he was Mayfield’s Entrepreneur-in-Residence at the time), and I was immediately impressed by his experience, knowledge, and enthusiasm. I spent several weeks in Silicon Valley meeting with people and firms, pitching and thinking. Pretty quickly, it became clear that the first firms that expressed interest were the right ones for Wize.

Tech-Surf-Blog: When and why did you realize that giving up the CEO reins was the way to go?

Doug Baker: It doesn’t feel much like giving up the reins — I’m the Chairman of the Board, and I’m integrally involved in most every aspect of Wize, actively operating the company in partnership with our CEO Tom. Tom’s experience and skill set are a great match for mine and for Wize.

Tech-Surf-Blog: I see you’re now stating the headquarters of the company are in San Mateo. Was that a requirement of the VCs? (This is the classic story for Internet startups here — that to get funded, they must move.) What was your experience in this regard, and what’s your opinion of this requirement?

Doug Baker: This has been a consistent problem for Minnesota-based startups. That said, it can be done. In Wize’s case, it made sense for us to have an office in Silicon Valley but that didn’t require us to all move there. With PrivateAccounts, a company I founded in 2000, we faced this problem as well, but ultimately we were acquired by E*Trade and kept our office in Minneapolis the entire time. So there is hope! Our investors see value in having a presence in both locations, and that’s an important part of the company’s competitive advantage; we’ve built a great team here, and our proximity to great people and — obviously — fantastic retail businesses is very important.

Tech-Surf-Blog: What will be the employee-split between the two locations? How many will stay here in Minneapolis?

Doug Baker: All of our original staff will be staying in Minnesota. Our offices are 3.5 hours apart on Northwest Airlines, which is less time than you can spend commuting in Southern California traffic, so there’ll clearly be some travel back and forth. Our two locations allow us to hire the best talent from across the country, and we will take full advantage of that.

Tech-Surf-Blog: What are your hiring plans? And where will most of the expansion be?

Doug Baker: Our first priority is to staff up our technology and product teams to build and create a world-class product. The staffing will take place wherever we can find the best people.

Tech-Surf-Blog: How do you see your online service expanding in 2007? New categories, for example? How will you differentiate from your competitiors, in a category most perceive as crowded and having no clear household-name brands that jump to mind? And how will Wize build big brand awareness?

Doug Baker: Our strategy for 2007 will clearly include category and content expansion, as well as finding new ways to extend our brand. We’re all about helping people find great products, and the platform we’ve built to do it — leveraging the collective wisdom of reviewers across the Internet — is just the tip of the iceberg.

Tech-Surf-Blog: Do you have a blogging or “new media” strategy? Anything you’d care to say on this topic?

Doug Baker: Blogging and “new media” is very important to us, especially as it relates to helping people get the information they need. We’re in the process of laying out our plans for 2007, but I can’t give everything away! [Ed.: The firm has already launched its own blog, linkable from its home page.]

Thanks, Doug, for taking the time. As Minnesota’s latest hot, new Internet company, we wish you all the best as you go forward. I promise not to buy another new product before checking its Wize Rank! By the way, I think the branding “Wize. People know.” is very cool. It really connects! So short, sweet, and memorable.