Interview Published May 27, 2003|
Dan Gutierrez, eCriteria
Dan Gutierrez is CEO of Amulet Development Corp., and the eCriteria (www.ecriteria.net) web database service. eCriteria allows users to create low cost, web-based databases through an easy to use interface. I thought it would be interesting to talk to an entrepreneur who had tried to get venture capital during the boom, but continues to survive and win customers despite the lack of funding. I spoke with Dan a bit about his struggles looking for venture capital, the service, and what he's learned about the process.
BK: Tell me a little bit about Ecriteria--what is the Ecriteria service?
DG: eCriteria is a web-hosted database facility, like Microsoft Access but purely on the Web. Businesses create their own databases, we host them, and provide a simple to use interface to access their data content. With eCriteria, databases are no longer locked on a desktop PC, but maybe securely accessed from any Web browser. Many of our customers attach their databases to their websites to add database functionality without having to learn programming, or buy expensive database software.
BK: How'd you come up with the idea, and what did you see as the opportunity?
DG: We came up with the idea in order to address low-end Web database requirements. Our main business is custom Web database development projects, and we recognized the need to provide a very low cost alternative to costly development projects. Nobody else had a solution like this, so we developed eCriteria. In addition to running eCriteria, we continue to build custom high-end projects.
BK: I understand that you tried to launch this with some VC capital at some point. What's the story behind your try at making it a VC-funded startup?
DG: We self-funded the development of our technology, and needed outside funding for marketing, sales, and PR. We tried to obtain venture funding just before the tide went out with Internet start-ups in 2000. It was bad timing to get funding, and VCs were only looking to put money into fields that had sex appeal. Web databases didn't have enough panache. We were close with one Santa Monica firm, but they decided to invest in a medical information site that ultimately went under. eCriteria is still going strong.
BK: What were the biggest issues that came up when you were looking for funding?
DG: The VCs we contacted didn't understand the value proposition of our technology, or didn't see how we could make money. This was our problem as first mover in a new space. Since then, Intuit came into our market with their Quickbase product and pretty much proved our case that the web-hosted database concept is viable.
BK: How are people using your service now, and do you have many users using it?
DG: We have nearly 3,000 registered users in over 55 countries around the world. 40% of our users are from outside the U.S. It is interesting to note that one of the VCs that turned us down is one of our biggest eCriteria users.
BK: What lessons did you learn, having gone through trying to pitch a VC? Would you do it again?
DG: We learned many valuable lessons from the funding search experience. I think the most important thing I learned is that it is better to find a way to self-fund a new enterprise if at all possible. Traditional business values can go a long way to building a new business or getting a new project off the ground. I don't think I'd try the VC route again.
BK: Do you think you'd take venture capital if the VC community suddenly decided that your area was of interest, and was willing to invest?
DG: If the VC community reevaluated the value proposition of web-hosted databases and determined eCriteria was an investment opportunity, yes, I would consider outside investing. If anything, the fact we've made a long run of it being self-funded shows we have staying power.
BK: What will you do differently the next time you have an idea you want to launch?
DG: We have plenty of exciting new product ideas, and we plan to boot-strap them into success.
BK: What has been the hardest part of getting the eCriteria service up and running, technically and as a business?
DG: The only technical difficulty we encountered since launching eCriteria is being able to add all the features we wanted. We have a very long to-do list contining new and exciting features, but being self-funded we're not able to jump on all of these as quickly as we'd like. From a business perspective, we haven't been able to do traditional marketing and PR. Instead, we've had to focus on low-cost grass roots methods.
BK: Finally, has it been difficult to both run a custom web development firm and also run the service?
DG: Because eCriteria and our mainstay service business are so close in nature, they complement one another very well. If a customer can't afford our custom services, we turn them onto eCriteria. On the flip side, if a customer outgrows eCriteria we propose a custom project to expand their feature-set. It has worked out quite well.
Copyright (c) 2003 by Benjamin F. Kuo. All rights reserved.
May not be reprinted without permission.