SMB

STARTUP TO WATCH

MashLogic: Links Done Your Way

In the world of venture capital fund-raising, the would-be entrepreneuris usually the party who goes looking for acceptance. However, that’s notthe way MashLogic got funded.

Instead, several partners at Bessemer Venture Partners sought outRanjit Padmanabhan with seed money and the cofounder title to startup MashLogic in late 2007. It was a match made in VC heaven. Today,Padmanabhan serves as the CTO as well as the acting CEO.

Together with the two Bessemer firm partners who recruited him and anengineer previously hired, Padmanabhan is one of the company’s fourcofounders. However, he has nearly full control over growing the company.The VC partners have no stake in the company outside of their own VCfirm, he said.

“I happened to come along at this time. I had the rightqualifications. The idea came from within the VC firm,” RanjitPadmanabhan, who wears several hats in growing MashLogic, toldthe E-Commerce Times.

Business Trial and Error

Bessemer Venture had an idea of what it wanted to do. Their goal wasto give Web surfers an alternative to a growing dependence on searchengines.

“When we start companies internally, we often think of them asexperiments. So far, this experiment has been very successful,” DavidCowan, a partner at Bessemer Venture Partners, told the E-Commerce Times.

No Guessing

It could be said that in a sense, all startup companies are experimental.MashLogic, however, has more than guess work on its side.

The results of that business experiment have been very encouraging.Users are responding well to the MashLogic software client, Cowannoted.

“We’re a young company and haven’t put as much polish on the productas we’d like. We know lots of things we’re going to do to make itbetter,” he explained.

A Whim

MashLogic developed a browser tool that gives users — both Web sitepublishers and visitors — contextual information about content on Websites. The plug-in is meant to enhance the performance of the Web browser.

The hyperlinks enrich the user experience by making it more personal,according to Padmanabhan. The technology understands user preferenceswith the content of the page and adds new content based on that.

A couple of the VC partners were already thinking about the conceptand had a few ideas about adding more content to Web pages. They had the idea that oftentimes publishers werediluting content with their own links.

The VC partners had already tapped an engineer who had a couple ofideas about making content links. Padmanabhan was also thinkingabout building something similar.

He was in the right place at the right time. The VC partners asked himto come on board as a cofounder.

The Mash Mania

The MashLogic software detects words that are relevant to a subjectsuch as music or sports and instantly adds links to relatedinformation. When users visit a Web page, the software scans thecontent and matches those words with content from the back-end system,Padmanabhan explained.

For instance, when a user reads a page that has baseball players’names on it, MashLogic adds links. As the user mouses over the link, apop-up appears that provides player stats and other information aboutthe player.

The software plug-in is a smart semantics application. Normally whenyou read a Web page, you jump to a search engine to find details aboutinformation not already linked, such as specialized terms and wordsthat are keyed to advertisers’ products.

“So we can eliminate the use of search engines by giving you more ofour own links,” said Padmanabhan.

The Browser’s the Thing

The plug-in works on Mozilla’s Firefox and Microsoft’s InternetExplorer (IE) Web browsers. MashLogic recently released a version forGoogle’s Chrome browser. So far, however, that product is not fullyfunctional.

In a couple of months, the company will have a version for the Mac. Bythe summer, it aims to support mobile devices like theiPhone, Padmanabhan said.

“It works on cross-platform browsers. So Windows and Linux browserversions are supported. It cares only about the browser, not theplatform running the browser,” he added.

Early Hardships

Padmanabhan had to overcome numerous technical problems. He beganthose efforts toward the end of 2007, and it took a little over one yearto solve them.

In order for the concept of adding useful hyperlinks to work, theMashLogic engine had to, for example, reliably pick out the names of bands andpeople on Web sites that have music content. Building anengine with that kind of knowledge was a pretty serious technicalchallenge, Padmanabhan said.

“We don’t crawl the Web in advance to find content on existing Webpages. Our engine had to be able to identify keywords on the fly.When you crawl a page, you have time to parse it. The first time yougo to a page is the first time we’ve ever seen it as well,” he said.

Equally Tough

Getting the engine to work was another arduous task, but thesecond major issue was no less challenging.

Besides just working, the engine had to deliver high performance andspeed without messing with the user’s experience.

“This was a very tricky problem to solve — the ability to scan a pagein real time, understand the user’s preferences on that page, applythem to the page and add links,” detailed Padmanabhan.

MashLogic launched the beta version in October 2008. The companystarted production late in the summer of 2009 with the first externalround of investment money.

Money Trail

Research and development used up all the seed money by 2009. Thecompany raised US$2.5 million from New Enterprise Associates and Bessemer plus a few angel investors inthe early part of that year.

Fund contributors included About.com Founder Scott Kurnit, LinkedIn Founder ReidHoffman and Wikia CEO Gil Penchina.

Actually turning a profit is a long way down the line, acknowledged DavidCowan, partner at Bessemer Venture Partners.

“We had revenue from day one. But we’re not even looking at turning aprofit yet,” Cowan told the E-Commerce Times.

Stretching the Dough

Meanwhile, MashLogic makes money through links to key advertisersrelated to content of the Web sites, according to Padmanabhan, and thecompany gets affiliate transactions as commissions. That’s theprimary revenue model.

MashLogic will remain in a growth stage financially at least for thisyear. After that, the company will look at tuning its revenue stream.

The money on-hand from investors will probably carry the company for20 to 24 months, added Padmanabhan.

New Challenges

While the money lasts, the immediate goal is to continue withdistribution of the product. In addition, Padmanabhan wants to ensurehigh performance and gain a few hundred publishers and 100,000users by the end of this year.

Perhaps an even bigger challenge is getting users to trust the links the tool provides and change their viewing behaviors. A longer-term goal is toreduce the need for search engines by adding more links.

“We expect to make a small dent in these goals by the end of thisyear. After that, 2011 is our year of reckoning,” Padmanabhanpredicted.

Competitive Edge

MashLogic is up against two types of competitors, according to Cowan.The first can be classified as companies that go to publishers andput pop-ups all over their sites. These are companies such as Snap and Zemanta.

“Those companies are about trying to put more impressions ofadvertisers in front of the user,” said Cowan.

The second can be classified as companies that have client sidemashes — companies like Hyperwords.

“Each one of these things caused us at Bessemer not to be satisfiedwith that as a solution,” he said about what lead to the founding ofMashLogic.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by Jack M. Germain
More in SMB

Elon Musk's Dec. 2 action to release The Twitter Files: Approve or Disapprove?
Loading ... Loading ...

E-Commerce Times Channels