Software to Watch over Me
David Gilmour's start-up is based on the provocative idea that companies should mine their employees' E-mail for business information
Let's say you want some inside information on a big potential customer. Maybe one of your employees has a buddy who works there. But how do you discover that useful connection? Finding out exactly who in your organization knows what -- whether it is people, places, technology, or product information -- is a maddeningly imperfect process. Simplifying that process is what Tacit Knowledge Systems, a Silicon Valley start-up, is all about.
Tacit's software primarily uses an employee's E-mail messages to build a profile of all the subjects that the employee knows about so that his or her coworkers can leverage that information better. "The first place a new idea shows up is in a private message from one person to another," Tacit CEO David Gilmour explains. "The question is, Can you pop open the lid on that treasure chest and use what's in the mail?" Gilmour sees Tacit's software as the crowbar companies can use to remove that lid.
| NAME: David Gilmour, 42
FAMILY: Married to Anula Jayasuriya; the couple have a seven-year-old daughter, Shanika.
ON TWO-START-UP COUPLEHOOD: Gilmour's wife is a molecular geneticist who currently is doing business development for another start-up. Between them, the couple hold seven degrees from Harvard.
HOW HE EARNED HIS WINGS: Gilmour, a licensed commercial pilot, was formerly a general manager of a division at Lotus Development Corp. He also founded ExperNet, which he folded into Giga Information Group in 1996. Along with Giga cofounder Gideon Gartner, Gilmour grew the company to $10 million in revenues at the time of its initial public offering.
ON HIS WORKLOAD: Gilmour hasn't quite finished filling out his management team, so his schedule is frequently ravaged by his need to spend time recruiting and juggling the chores of the senior executives he hasn't yet hired. One typical afternoon last spring, the CEO fielded first a phone call from a trademark lawyer ("That was something a CFO would handle," he said dejectedly) and then another call from his affable but empty-handed recruiter.
The software -- sold under the name KnowledgeMail -- tracks the words and phrases that employees use in their E-mail correspondence, as well as in the documents in their personal directories. Using a password-protected Web site, staffers of a Tacit client can search for people who have used specific terms in their messages and documents, just as they would do a search at Web sites like Yahoo or Google. But instead of receiving a list of Web-page matches, employees receive a list of the names of coworkers who have used the specified search terms.
Gilmour believes that KnowledgeMail will help companies find critical business information more quickly and inexpensively than ever before. He also believes it will compel them to reward smart, well-informed employees for sharing information with their coworkers. "When there's a question within an organization, our system gives employees a chance to raise their hands," he explains.
Perhaps. But what about the fear factor? The idea of having their E-mail musings cataloged automatically may be enough to send workers into an Orwellian panic. And make no mistake: workers do worry about Big Brotherism in corporate America. "I think privacy has become the #1 civil-rights issue of the information age," says Dave Steer, spokesman for TRUSTe, a nonprofit that tracks how technology affects privacy concerns. "Any effort by a company to collect information about people -- without disclosing what's being done with that information -- will fail."
Gilmour couldn't agree more. In fact, the Tacit CEO argues that his product actually enhances employees' privacy within a company, even as it sorts through their E-mail. An employee's profile is private until he or she decides which pieces of it to make public. The software ensures that privacy by giving employees the power to add terms to their individual profiles, in effect giving them veto power over the system.
"Privacy is the means we use to draw users into the system," Gilmour explains. "The profiles are visible only to that particular employee. At the technical level, customers are not allowed to tamper with their employees' profiles."
But even if workers choose to keep private all the terms derived from their hard drives, they're still drawn into the system. If you know a lot about Java programming, for example, but you don't include that on your public profile, the system will still E-mail you when a coworker searches for Java experts. The searcher doesn't know you're out there, but you'll know your coworker is in need -- so maybe you'll volunteer to help.
Tacit reports that adoption of the technology by users has, so far, been good. At one large company, for example, in a matter of two weeks 130 of 150 software engineers registered to use the system.
Gilmour first conceived of Tacit three years ago in an airport-bound taxi. He jotted down notes on the plane ride and then pitched the idea to an executive at Texaco. The executive said he'd gladly sign on as a paying customer if Gilmour could build the product. Within weeks Gilmour was working from home on the prototype. Since then, Tacit has focused almost exclusively on signing up customers of Texaco's size, on the presumption that companies with legions of anonymous employees are more likely to need the tool. "For us, the low-hanging fruit are watermelons," says Chris Palombi, Tacit's director of business development.
Larger clients also mean larger sales transactions, since Tacit charges for its product by the number of profiles. But that doesn't mean Tacit will always focus exclusively on big companies.
"Almost every company should be a customer and willing to pay enormous amounts of money for the software," coos Steve Jurvetson, managing director at Draper Fisher Jurvetson, a venture-capital firm that has funded Tacit. "We've worked with a lot of enterprise-software companies, and from prior to the launch until today, this company has booked more revenue than any company we've ever heard of."
Tacit ideas: Gilmour argues that his product actually enhances employee privacy.
Although his company does have first-mover status, Gilmour understands that Microsoft and IBM control the E-mail-software market and that either company, seeing Tacit's early success, might choose to bring a similar product to market. Then again, one of them might just make a juicy buyout offer. Gilmour says that he's already received "ambiguous and unambiguous overtures," though he has no plans to sell.
Of course, any whiff of a windfall for Gilmour and his crew is premature. As with all technology businesses, the company's success hinges on how much its product is adopted by end users. That's where that privacy issue comes to the fore. Gilmour is betting that his solution will satisfy even the most skeptical Texaco employee. If he's right -- and if he lands the customers he's targeting -- "this company has the potential to have revenues well north of $100 million in short order," he predicts.
Joe Palazola, district manager, AT&T Business Services Sales Systems Team
"The more I hear about this thing, the more I think it's going to take off. My boss is always talking about creating profiles about employees' training and skill sets. This plays into that desire, and I think users will embrace it. At AT&T, for example, a lot of general managers and tech people have left for dot-coms. That leaves behind a lot of people who don't know who to talk to when they have questions. We have a young sales force, and it would be great to enable them to identify who has sold a certain product before or who can give them information about a specific customer. Of course, we're always leery about buying from start-ups. We need to get testimonials from other customers, and the product needs to go before a review board for testing. We want to know that this product can take a pounding."
Sarah Gerdes, CEO of Business Marketing Group
"Tacit needs to show the two dominant E-mail players -- Microsoft and Lotus -- that its product will extend their technical offerings where neither larger organization can go alone. This is just a guess, but I suspect that Tacit is working on future joint development with both of these companies. But it's hard to work with two platform companies because, ultimately and inevitably, they'll want software developers to make a choice about which platform they use. It is possible to say no, but you won't get preferential treatment beyond that point. Historically, several companies have grown quite large by playing Switzerland between two big players. But, for example, Tacit might find that a competitor will try to gain an edge with Microsoft by agreeing to focus exclusively on Microsoft's platform."
Pricing: Before discounts, KnowledgeMail licenses are $400 per profile per year.
Projections: Gilmour is slippery on this subject but says he had zero revenues in 1998 and believes the company will top $10 million this year.
Funding: First round, $240,000 from Gilmour's savings and two angels. Second round, $4 million from Draper Fisher Jurvetson and a few angels. Third round, nearly $6.9 million from Reuters Greenhouse Fund, Draper, and some angels.
Patent applications drafted: 17
Patent applications filed: 4
Number of foosball tables: 2
Public customers: J.P. Morgan, Texaco, and Giga (which owns a piece of the company)
Incognito customers: At least 4 of the top 100 companies on the Fortune 500
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