Confessions of an Information Sinner
Once, Ron Bienvenu helped cause information overload. Now he's found entrepreneurial gold in helping companies fight it. And he's not alone
Ron Bienvenu is contrite. "We were information polluters," he admits, sounding like a chastened soul in the confessional. "We were real contributors to information glut."
Bienvenu, 33, is describing the days back in 1991 when he and a partner published Energy Alert, a newsletter for energy-industry executives, analysts, and investors. Each morning the two would leave the grimy apartment where they both worked and slept and hotfoot it over to the Securities and Exchange Commission to take notes on every remotely relevant filing. Back at the office, they'd dump it all into a computer and then fire-hose the whole mess at their customers in the form of a fax.
Seven years later, Bienvenu is a reformed man. And the entrepreneur is atoning for his sins by running a company that aims to alleviate precisely the sort of overload he once helped create. SageMaker Inc., based in Fairfield, Conn., sells a software system that automatically culls information from as many as 4,300 sources and gives users what they need--and only what they need--based on their predefined criteria. In this case virtue hasn't had to be its own reward: SageMaker's projected revenues for fiscal 1999 are $5.8 million, up from half a million four years ago.
Scores of entrepreneurs are pursuing information streamlining as a market niche. (See "The Art of Reduction," below.) But unlike many of them, Bienvenu has been in the content business for a decade--a decade in which the rise of the Internet has drastically changed what it means to be a good information provider. Bienvenu's career mirrors that development: over the years he has repeatedly shifted his strategy to satisfy customers that once were starved for information but have grown increasingly fat and unhappy.
This particular pilgrim's progress began in St. Martinville, La., a poor, rural community of sugarcane farmers and blue-collar workers. As a young man, Bienvenu divided his time between weighty reading (Darwin's The Origin of Species and Mao Tse-tung's On Guerrilla Warfare) and less studious pursuits. "Let's just say we like our drinking, dancing, and college football where I'm from," says Bienvenu, a squat man with close-cropped blond hair and azure eyes.
If Bienvenu's wild ways were a product of his environment, so was his early attitude toward information. The entrepreneur began to form his impressions about what and, more important, how much businesspeople needed to know after he'd moved to New York City in 1988. The savings-and-loan crisis was building, and hostile takeovers, closings, and mergers were taking place at a furious clip. Investors couldn't get their hands on enough information.
Bienvenu, then an employee at the Hoboken, N.J., office of SNL Securities, was happy to supply that information. Every day SNL's Washington employees would gather reams of bank filings from the SEC and fax them back to Hoboken. Using desktop-publishing tools, Bienvenu turned those filings into a product called ThriftWatch that SNL sold to bank analysts for $2,500 a year. "We weren't adding value to the information--we were just repackaging it," says Bienvenu.
But that's a conclusion formed in retrospect. In the late 1980s, data dumping was not only acceptable but downright lucrative. Recognizing an opportunity, in 1989 Bienvenu persuaded an old army buddy, Tore Nelson, to move to Washington and help him launch a company that would replicate ThriftWatch for a different industry. Envisioning a marketplace that was huge and global, Bienvenu narrowed the choices to telecommunications and energy--and energy won on the flip of a coin. The next order of business was to name the company. The partners settled on the Vestlash Group, after a pimp on the TV series Starsky & Hutch.
Because its overhead was low, Vestlash managed to eke out a small profit for three years. But the market targeted by Energy Alert wasn't nearly as data starved as the one served by ThriftWatch. Vestlash had some paying customers, including a few who shelled out as much as $1,200 a year for the newsletter. Many more found themselves bombarded with free two-week trial subscriptions after Bienvenu spotted their names in the newspaper and tracked down their fax numbers. "We were the original spammers," says Bienvenu. Even those who wanted the newsletter complained about its low information-to-relevant-information ratio. Part of the problem was that Bienvenu and Nelson were often clueless about the companies they wrote about. "If it looked like an oil company, we'd jam it in our newsletter," says Bienvenu. For months the two filed detailed reports on the financial activity of a company called Oil-Dri, until a customer asked why they were so interested in a manufacturer of kitty litter.
Bienvenu hadn't changed his ways when he changed industries, but in the early 1990s he was confronted by something he couldn't ignore: the Internet. Here he was, a paper publisher indiscriminately pushing out raw data. And here was the Internet, which electronic publishers could use to make value-added information available upon request. Given that environment, "I just didn't think that our publishing model was sustainable," says Bienvenu. So he sold his half of the business and took a job as a director of product development for John S. Herold Inc., a petroleum-industry research and consulting company in Stamford, Conn.
At Vestlash, Bienvenu hadn't given a hoot about how people used information. At Herold it was his job to care about it. Bienvenu's mandate was to develop an automated research report called the Herold Oil Headliner. At Herold, analysts would root through dozens of paper sources in order to put together, for example, a net-asset valuation of Texaco; then when it was time for Texaco's next valuation, they'd start all over again from scratch. Bienvenu built systems that would automatically compile specific pieces of information from different electronic sources and then store that information in a database from which it could be retrieved, thus improving productivity.
For Bienvenu it was a revelation: people didn't want a lot of information; they wanted the right information delivered efficiently. And to Bienvenu, "efficiently" meant electronically.
But there was a hitch: back in 1993, most critical sources of energy information still hadn't been digitized. A niche beckoned, and Bienvenu left Herold to start SageMaker, whose mission was to make energy publications available over computers. Soon industry publishers like McGraw-Hill were lining up at SageMaker's door, each with its own assortment of products that it wanted to present in electronic formats ranging from proprietary databases to news feeds. Bienvenu gleefully built them all, collecting additional fees for training users. Before he knew it, he was sitting on a company with nearly half a million dollars in sales. "I was traveling first-class like a big businessman," recalls Bienvenu. "I thought I was the stuff."
Only it was the wrong stuff. Bienvenu's next stop on the road to Damascus was a hallway in Kuwait Petroleum International, an oil company in London. After an arduous day spent training KPI researchers for one of his publisher customers, he was cornered there by information-systems manager Mary Henderson, who wanted to know how the company's analysts were supposed to learn to use five different information products from different publishers in different formats, all built and installed by SageMaker. Bienvenu was stunned. "I wanted to believe that I was easing information overload," he says, "but here I was just adding to it again. Now we didn't just have information smog--we had information- system smog."
On the plane home Bienvenu pondered the situation. He knew what he should do: bundle together all those publications and services so customers could use them as though they were a single product. But he didn't know if he could do it. Back at the office he posed the problem to his senior programmer, Mikhail Kuzemchenko, a Russian scientist with the temperament of a French chef. "That is impossible," Kuzemchenko replied. Bienvenu decided to let things simmer. The next morning Kuzemchenko came back with the seeds of a solution.
His scheme was to transform SageMaker into a kind of newsstand for the hundreds of electronic sources that would normally flow into companies separately. Publishers would send their information to SageMaker, which would republish it all in a single format and deliver it over the Internet to servers inside energy companies. "That way when a customer sits down and says, 'What do we know about Chevron?' anything about Chevron from all those sources appears under a single interface," says Bienvenu. "You don't have to search 50 Web sites. You don't have to launch 50 applications." The energy companies would pay the publishers for their information, and the publishers, in turn, would pay SageMaker for carrying it. It looked like salvation.
The plan had only one problem: no one wanted in. Publishers weren't interested in the service unless their customers were clamoring for it. Customers weren't going to start clamoring until the system was rich with publishers' products. It was like the early days of selling radios, says Allan Siegert, SageMaker's director of financial sales: "You are asking the customer to take it on faith that the static will soon become a classical-music station, news, sports, and weather."
Bienvenu finally broke the stalemate by using an old Vestlash tactic: he gave the service away free. He rerouted some oil-related news feeds through his system and piped them into Amoco, Conoco, and ARCO. When the technology directors at those companies saw that analysts could get everything they needed by using just one application, they agreed to nudge their own information suppliers to work with SageMaker. The catch-22 was successfully subverted.
Bienvenu's latest quest is to evangelize other industries. His crusade is well funded: last spring the entrepreneur raised $2 million from the Internet Capital Group, $2 million from EnerTech Capital, and $1 million from Woodbrook Capital. That money will support missionary work in such vertical markets as pharmaceuticals, health care, and telecommunications, all of which are sagging under the weight of too much stuff coming from too many directions. But Bienvenu doesn't have the idea to himself. "Other sectors already have a number of players," says an executive at Wood Mackenzie Consultants, whose customers include energy, pharmaceutical, and agrochemical companies. "Competition will be stiff."
The most resistant market may be Bienvenu's first target: Wall Street. "If you've taken a look at the ticker and read the paper, you can see that it's a tough time to sell to banks," says Wayne Andrews, vice-president of equity research for Raymond James & Associates Inc., an investment firm in St. Petersburg, Fla. Recognizing the difficulties, Bienvenu is taking a stealth approach. Last August he hired Andrew White, a former executive at Reuters, made him vice-president of marketing, and charged him with creating a strategy for winning over banks' oil and gas analysts, who he hopes will convert others in their companies. "We want to create an insurrection," says White.
Bienvenu knows it won't be easy. He's less conversant in the new markets than he is in energy. He has to start amassing information sources from scratch. But none of that fazes him. "Once I get to the top of a mountain," he says, "I'm just searching for a higher mountain."
Joshua Macht is an associate editor at Inc.
Value: The price of wisdom
What's the value of a trade magazine to your company? How about an industry newsletter? Is that database service you subscribe to paying its own way?
Companies may or may not know how much they spend on information. They almost certainly don't know how much value they get from it. Ron Bienvenu hopes to change that with a digital information meter that measures information usage the way a utility company measures electricity usage. As energy-company employees access news and research reports through Bienvenu's SageMaker system, the meter records who's reading what. The energy company can then weed out material that's just gathering dust.
Publishers want that usage data as well, especially those that worry about their content being sucked into a black hole. "It gives us a quantifiable way to assess how effective we are," says Patricia Bridges, vice-president of marketing and alliances for Reuters New Media, in New York City. But there are hidden dangers, Bridges warns. "Sometimes a thousand hits to one source might not be worth as much as one hit to another," she says. "You have to be certain that you are comparing apples to apples."
Opportunities: The art of reduction
Ron Bienvenu isn't the only entrepreneur proffering an umbrella to the data deluged.
Rob Wrubel, for example, has decided that the answer to inefficient Web searching is a question. Wrubel is CEO of Ask Jeeves Inc., the on-line equivalent of the Shell Answer Man. Users type in questions using the language of casual conversation ("Why is the sky blue?" "What's on television tonight?"). Ask Jeeves then checks a database that holds answers to millions of such questions. The database returns answers and suggests links to related sites located by various search engines.
Even if people find everything they need, they may not have time to read it, right? No problem, say the founders of Cartia Inc. Cartia has a software product called ThemeScape that "reads" through massive files, extracts key concepts, and then illustrates the relationships among those concepts in a kind of topographical map. Set loose on a 15,000-page history of Silicon Valley, for example, Cartia might draw a giant Microsoft mountain sitting smack in the middle of the antitrust region.
For those times when pictures aren't worth a thousand words, there's Autonomy Inc., a spin-off of Neurodynamics in Cambridge, England. Autonomy makes software that uses a complex mathematical process to "weight" the words in a sentence based on the probability that they are important to its meaning. For example, in the sentence "The president, wearing a blue tie, arrived at the White House with his dog in a black limousine," Autonomy would know that what's important is the president's arrival at the White House and not the tie. Well, not the dog anyway.
Ironically, those fledgling companies could fall victim to the very problem they're out to solve. "Our biggest challenge is just to get the message out through all the noise on-line," says Wrubel.