Mark,
Welcome aboard!!
What rich experience!
For me, it was hard to appreciate Santa Fe's possibilities until I realized how
SMALL it is. Much smaller, for instance, than Cedar Rapids, Iowa. Once I
factored in its size, I came to realize how extraordinary is its energy.
Nick
Nicholas S. Thompson
Emeritus Professor of Psychology and Ethology,
Clark University (nthomp...@clarku.edu)
http://home.earthlink.net/~nickthompson/naturaldesigns/
http://cusf.viviti.com
----- Original Message -----
From: Mark Montgomery
To: Friam Friam;topics & issues
Sent: 5/26/2009 10:49:15 AM
Subject: [FRIAM] Introduction- Montgomery- Kyield
Hi folks,
I may have met some of you in person-- sorry for any redundancy. This may be
more information than you seek in an introduction, but it's the minimum I can
share
I am a very experienced entrepreneur, consultant, and founder of Kyield -
www.kyield.com . My wife and I moved to Santa Fe from Half Moon Bay, CA early
this year. We enjoy living here- mountain and high desert lovers, but I am less
optimistic about the business climate in my interests- primarily due to culture.
Originally from Seattle area, I was engaged with my own business in the very
early 1980s when I became deeply involved with the 'team Washington' strategy
and ensuing effort, which was a very successful private/public sector effort.
Seattle was still fairly depressed after the Boeing bust in the 70s just to get
hammered by the deep recession of 1980. It was a dynamic time and place- at the
time quite a small market- that resulted in quite a few global successes. I was
directly involved with a couple and indirectly involved with most in that it
was a small community. I learned a great deal, including that quite a number of
essential ingredients need to come together in order to compete with the
entrenched in the global economy, without which it rarely occurs. By compete I
mean building globally competitive companies.
My consulting firm/work took me to the SW near the peak of the S&L crisis. I
performed marketing audits on most communities in the SW for investors,
bankruptcies, turn around plans, acquisitions, etc. We were ready for a change
and decided to move to Scottsdale and then a couple years later up to a mini
ranch near Prescott. We were publishing self guided management systems for
remote small businesses as part of our consulting firm when the
commercialization of the Internet occurred. We were toying with software at the
time- business planning, execution, etc. - a few years before they became
common, so I decided to experiment on the Web. Virtual Franchise was our first
effort- highly evolutionary, the effort quickly turned into I think the first
personalized small business network- offering learning, applications, social
networking, consulting, and e-commerce sales. The subscription service was
among the most successful in the 1995/96 time frame.
Our growth rate was huge- the quality of members outstanding- some business
modeling issues were still challenging- for example fraud was still a big
problem then for online vendors, but so too were the costs to grow, so I
started searching for venture capital. I found no one in the SW in VC working
at our level, and most in SV who were would be considered competitors- if not
already, they soon would be - the pattern then for e-commerce was to copy
globally and fund locally. Still is to some degree.
One of our biggest challenges was with local vendors at the time- they weren't
nearly flexible enough for the demands of the medium, or fast enough to
adapt-or honest enough to work with me, so I decided to jump in totally myself,
bringing all of the technical services in-house, training in networking and
programming myself. The result was one of the first in-house e-commerce
incubators, although we didn't use the name incubator- and it shouldn't be
confused with most that use the name. Our effort was more like a small idealab,
or an internal incubator for a corporation. We worked with some clients on a
virtual basis, but we weren't in the real estate business. So for several years
we worked (mainly me and one other partner with remote teams of contractors)
very hard on the many issues facing viable and sustainable Web businesses, with
every increasing technical sophistication. We produced the first shop the web
campaign and portal, and a global learning network for thought leaders- all top
universities- agencies- corps were members, attracting a very strong
membership- probably the world leading effort, with multiple firsts in software
applications. Our Kyield effort has roots in the latter. I was a pioneer of
sorts in e-commerce, also KM and Semantic Web, although frankly both terms have
been abused in the minds of many enterprise customers, and so I tend to be the
messenger of bad news lately, delivering tough love if anything. At the time
Google was being hatched, for example, I was deeply involved in the science of
search engines- looking at several to license- tested several, finding Google
to be best- before the angel round and long before the VC round, which probably
occurred in part due to my communications with the investors. It had modeling
problems, not technical.
We had multiple offers to relocate the incubator, one to take it public on
relocation to the east coast, but for a variety of reasons- ethics (look at
what happened to incubators after IPOs) & preference of team members on where
they would live, we declined. We never did receive a viable financing offer
from the SW. We did receive multiple institutional offers for a VC fund near
the peak of the bubble, but I declined for reasons I hope are obvious. I did
continue to work incubating our own ventures as well as towards a VC firm,
launching Initium VC in 2002, based in AZ. We had a team of five including two
very senior venture partners, myself, a biotech CEO, and three very strong
scientists.
Initium was a next generation firm- interdisciplinary- multiple functionality
was our focus- working at the earliest stages of commercialization. We
succeeded in getting on the radar as an emerging leader of many top limited
partners, and competitors, with some substantial offers, but not of the type we
considered sustainable, so after three years or so we sized the firm down to
three of us which was sustainable. One of our friendly competitors in SV was
interested in joining forces- most LPs still are strategic CA investors- so we
relocated. The discussions included a large A round for Kyield, a new CEO for
Kyield, and my joining their firm as VC partner. We relocated to the Bay area
just in time for the financial markets to unwind, staying a year before looking
for a new home. We took a road trip to look at several places- all of which
we've been to many times- including SF, and landed here.
I introduced Kyield to all of the appropriate private and public sources in NM,
most of whom pointed us towards LANL's small business program. It wasn't a
match for us- no SB program is- I've been counseling on SB programs since the
early 1980s, but I played along for a while in large part to test the system.
It failed.
My personal advisors include quite a few of the most experienced and successful
tech entrepreneurs, venture capital partners, and scientists. In several cases
we've co mentored for years. Our current plan for Kyield is simply to license
it to others rather than a build out- there is no incentive to accept the risk
of investment or to invest more to built it out- that would benefit NM, but not
us, so without very strong community support it doesn't make sense.
I'm currently writing a book about our experiences, global economics,
technology, and finance, with a particular focus on modeling of reforms, and
innovation.
>From several months on the ground now, for what it's worth- NM doesn't need to
>promote complexity theory or R&D, but rather human capital improvement in
>entrepreneurism- particularly relating to entrepreneurial culture, but then
>that's assuming that the culture desires more commercialization. I'm not at
>all certain that it does, frankly.
So while I have an interest in complexity and software, I don't think it should
be the priority of SF or NM. I could be wrong- seeking evidence that I am.
Otherwise open to suggestions. Regards,
Mark Montgomery
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