internet enterpreneurship course 2001

Internet Enterpreneurship Course 2001• Dana Teltsch

• Shlomit Wagman

• Moshe Babaioff

• Tzachy Reinman

• Chezzi Lifshitz

• Yevgeny Mugerman

2

Presentation Goals

• Introduce Banter.

• Present our lessons from Banter as a model of Start-Up company.

3

Content

• Overview

• History

• Technology & Products

• Market

• Business & Finance

• Lessons

4

Company Overview

• Free text classification technology.

• Electronic Customer Relationship

Management (e-CRM).

5

Overview(cont.)

• Founded at 1997.

• 140 employees.

• Privately held company.

• 4 funding rounds

Last (3/2000): 15 million $.

• San-Francisco, U.S. Headquartered.

• Jerusalem, Israel Technology center.

6

History

• Idea background– IDF– Octel

• 6/1997, Founded by– Yoram Nelken– Rick Kohler– Yoni Rozen

7

History(cont.)

• 1998, First product - Mail Application • 1998, Betas:

– Vocaltec– Verisign

• 3/1999, First customer- Wells Fargo Bank.• 3/2000, 4th funding round

– American VCs New Management– Banter’s main marketing efforts from 3/00

8

CRM Problem

B2C relation, companies must manage their electronic customer relationship.

• High volume.

• Cost of many agents.

• Communication consistency:– e-mail, chat, FAQ

• Difficult business environment.

9

eCRM Solution

Integrated electronic customer contact center.

Automated /Semi-Automated customer relationship management.

Previous Technologies:– Forms– Rule Based– Offline Learning

10

Still Problem…

• Forms– Unappealing– Not scalable

• Rule Based – Complex– Not scalable– No learning

• Offline Learning– Changing environment– Lack real-time adaptation

11

Banter’s Technology

Relation Management Engine (RME):

• Natural language processing.

• Free text classification.

• Online learning.

• Adaptive Knowledge Base:• Improve accuracy.• Dynamic environment.

• Noise tolerant.

• Scalability - new areas.

12

Banter’s Products

• Banter Reply 4.1 - e-mail• Banter Live 1.0 - chat• Banter Self-Help 1.0 - automatic real-time

response

• Future Generation:– Multi-language

– Voice

13

NaturalLanguageProcessing

E-mailQuery

IntentClassification

Confidence Low

SuggestedResponse

Medium

Datafrom Other

Systems

Customer

Route toAgentQueue

Agents

AutoResponse

Approve or Choose

Response

High

Write orEdit

ResponseAccurate Response

to CustomerQuery

Feedback

Banter Reply

14

15

Content

• Overview

• History

• Technology & Products

• Market

• Business & Finance

• Lessons

16

eCRM Market

• Estimated of hundreds of billions $.

• Accelerating growing market.

• Strong competitors.

17

eCRM Competitors

– Market Cap: 1 B$

– Customers: Bank of America, Cisco, e-Bay

– Market Cap: 100 M$

– Customers: 21 of the 50 biggest companies in the world

– Market Cap: 40 B$

– Partner, OEM agreement

18

Classification market & competitors

Text classification engine– Portals

• Competitors– Autonomy - 3.4 B$

– New companies

• Banter claims a significant technology advantage

19

Business Model

• Conservative one: – Selling products for money !

• High-End market

• Pricing by:– Number of agents– Number of transactions

20

Business Model (cont.)

• OEM - become standard engine for eCRM– Pricing per customer

– Siebel

• Trust policy - licensing.

• Enter new vertical markets.

21

Customers

1998, Beta sites:– Vocaltec

– Verisign Inc.

Current Customers:– Wells Fargo Bank

– Amero Bank

– Zone Labs Inc.

– Christianty.com

22

First Major Customer

Wells Fargo & Co. Bank

• Biggest on-line interactive banking in U.S.

• Bank-Client relationship - most important!.

• 10,000 messages per day by 500 agents.

• Less agents, better and faster communication.

• Helped to improve the product.

23

Funding Rounds

1997, Founder/Angel Rick Kohler - 0.5 M$

4/98, Israel Seed

1999, STI Ventures

3/00, Lucent Ventures & Mayfield - 15 M$Valuation: 60-140 M$

2001, Coming soon:– Banks– Current invested VCs

24

Turning Points

• CEO replaces Yoram Nelken• Rick Kohler leaves • Wells Fargo Bank as first customer• Israel Seed and the American VCs• Name changes

– 11/1999 Aspect Software Banter Technologies– 2/2000 Banter Technologies Banter

25

All the Aspects in the world...

aspect.comaspectdv.comaspect-online.com

• aspect-software.com

• aspect-vision.co.uk

• aspectworld.com

26

Mistakes

• Angel investor instead of VC.

• Professional CEO hired very late.

• Focus on technology on account of business.

Registering in Israel

27

Content

• Overview

• History

• Technology & Products

• Market

• Business & Finance

• Lessons

28

Lessons

• Choose your VCs– VCs have money

– VCs need to invest

– Interview them!

• First class VC – Connections

– Ideas filtering

– Connections with best managers

• Be open with the VC

29

Lessons (cont.)

• Try making competitor a partner.

• Develop product with customer.

• One mistake doesn’t kill a company.

• The power of spirit– The founder is the heart of the company.

– No need for 50% in order to make a difference.

30

One More Lesson...

“Watch one,

Join one,

Start one!”

31

Thanks

• Yoram Nelken - Banter

• Yossi Barak - Banter

• Michael Eisenberg - Israel Seed

• Matt Stein - PipeLive

• Roberta Chester - Hebrew University