RedOwl Analytics: The Silent Whistleblower
On Wall Street, pending lawsuits and insider trading are a recipe for PR disaster. Clients pack up to take their business and money elsewhere, and the legal fees start piling up.
RedOwl Analytics, a Baltimore, Maryland-based start-up, hopes to minimize those risks by harnessing the power of big data.
The start-up tracks workers' behavior on a near-constant basis, paying special attention to their digital trails on Gchat, Blackberry, and email. It's like a high tech whistleblower no one can hear.
The data RedOwl unearths can be a gold mine for companies when facing the liability of an employee-turned-criminal. For those already in court, having that data in their pocket might save their case and prove the employee acted alone.
"We thought hard about who might be interested in this sort of information and we realized a number of private sector and financial companies would," said Renny McPherson, RedOwl's director of business development and strategy. "There's so much liability in that data. We saw that banks had paid billions in legal fees in the past few years and tens of billions of fines in the past few years, so we thought, 'There has to be a better way.'"
After several test pilots, RedOwl can finally suss out wayward behaviors before and after they've turned into crime. The software is customizable and can be programmed with a data set using the company's own internal infrastructure or a secure, cloud-based format. From there, the data is visualized, making it easy for employers to ask questions and find a solution.
"We'd love to get to the point where people can start asking questions [of the data] on their own," said McPherson, whose start-up is still in its early stage with only 17 full-time employees.
"RedOwl started when a group of statisticians, software engineers, and intelligence veterans who came together to harness three macro-trends," he recalled. Those newly minted PhDs were looking at "advances in inferential statistics, the scalability and cost of cloud computing, and the ever-growing liability to defend against (and exploit) the corporate digital trail."
Not surprisingly, the idea won over judges at the InvestMaryland Challenge in April and raised a seed round of funding in 2011, soon after its launch.
Before RedOwl seeks Series A funding early next year, McPherson plans to roll out the full version of its software this fall.
RedOwl, which derives its name from the color of a siren and the nocturnal bird's wisdom, is based in Baltimore, a start-up hub better known for its work in life sciences than in big data. Still, McPherson said he couldn't imagine working anywhere else.
"Baltimore has a burgeoning and exciting start-up scene," he said, noting his office is "two floors below a tremendous tech incubator Betamore and next door to ParkingPanda."
That excitement wasn't lost on RedOwl CEO Guy Filippelli, who moved to Baltimore so he could take advantage of the city's technical talent.
In terms of competitors, McPherson said he has few, though RedOwl's biggest challenge remains convincing employers they'll find it invaluable.
"Given the attention we have paid to the value of this sophisticated tech, and an appreciation for the human analysis needed with that tech, we see this providing a great solution over time," he said. "The more we keep testing this out, it's just going to be of greater and greater value."
He added, "If we have success, people will crop up to do something similar, but what we're doing is really unique."
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