Child Entrepreneur David Koretz, Now CEO Of Mykonos Software (Part 4)

Sramana Mitra: What was the concept behind the business you founded just as you went to Babson? 

David Koretz: It was an information sales business. It was a Dun and Bradstreet and Axiom type of company. At the time all of those products were all offline products and we were going to take them online.

Sramana Mitra: Did you stay at Babson?

David Koretz: No, I packed everything up and left. Technically I am probably a second-semester freshman there. This was 1998 and I stopped going to class so I could write the business plan and get venture funding.  I was funded by Tom Golisano, whom I had met when I was 14. I was doing an introductions occupation class in my high school and my teacher gave me a professor at RIT who taught business. I told my teacher I did not want someone who taught business, I wanted someone who did business, so I asked to shadow Tom. I ended up calling him every day for 40 days until I was finally able to get through and spend a day with him as part of a shadowing program.

Sramana Mitra: How much money did you raise while you were at Babson? 

David Koretz: I raised $275,000. We did two things that nobody  had done before. We built the first online engine that allowed you to input a metropolitan statistical area and some classification codes and it returned data in real time. We had a licensing deal with Axiom, and we put an overlay of NAICS data which made us the first NAICS compatible sales system. We charged on a cost-per-lead model. We flat rated that model to make it small business compatible.

Second, we took it a step further. They would update the databases by shipping 6,000 phonebooks to Asia where they were input manually for six cents an hour and sent back on CD-ROM. Sometimes you can have 30% error rates with those databases which is very high for sales and marketing. We built a product called Persephone, after the Greek goddess of the harvest, which went out and scoured the entire web.

Sramana Mitra: That sounds a lot like what Intarka did. That company was venture funded and was one that I founded in 1998.

David Koretz: Small world! There were only a handful of companies doing that. Were you scouring the NetSol database?

Sramana Mitra: No, we were scouring the Internet. We had AI algorithms to do the work for us. 

David Koretz: We also built AI algorithms, and we took the NetSol database and scoured off of them. We used hundreds of threads so we could pull into the database quicker. On the other end the challenge was knowing if the data was better or worse than what we already had. That is when we started using AI to do qualitative analysis based on what we had. Those pieces of technology were sold off separately to different companies, but it led to another good exit.

Sramana Mitra: When did you sell?

David Koretz: We sold in March 1999. In August I started BlueTie, which is a SaaS company. I believed that applications were going to shift to the cloud. We were the first company to see that email collaboration did not makes sense inside of small company offices. We built an alternative to Exchange Server from the ground up. We were the first app that could do drag and click, double click, and really make the Web environment feel like a desktop experience. Today it has 1.7 million users and 250,000 small businesses hosted on that platform.

This segment is part 4 in the series : Child Entrepreneur David Koretz, Now CEO Of Mykonos Software
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