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About Home Calendar Forums Services - SoCal TechNews - Thursday, September 16, 1999

Copyright (c) 1999 by Benjamin F. Kuo

ISSN: 1524-6736

   -- Special: Interview with Farhad Mohit, President & CEO,

   -- Ticketmaster Online-CitySearch's Conn Talks

   -- Investors Pay Idealab Fund High Premium

   -- Net-based Entertainment On the Rise

   -- Vitesse Sets 2-for-1 Split

   -- THQ Releases Sinistar Sequel

   -- Launches New Site

   -- Digital Insight Signs MIT Federal Credit Union

   Upcoming Events


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 nearly $1 billion last year?

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 When your future is at stake.


Special: Interview with Farhad Mohit, President & CEO,


It's been a few weeks since my last round of interviews, but in continuing

with my focus on innovative high tech entrepreneurs here in Southern

California, I interviewed Farhad Mohit, President and CEO and a foudner of in Santa Monica., provides customer feedback to users on online vendors, and

recently signed a deal with Consumer Reports to offer their ratings

on Consumer Reports' web site. If you do any sort of online shopping, you

might have begun to notice their post-purchase surveys at online


Farhad Mohit:

BK:  How did Bizrate get started, and what prompted you to start the company?

FM: I was in business school in '95 when I first became exposed to the Internet

and immediately saw it as an incredible opportunity.  Here was something

that was going to change the world, and I was in a great position to be a

part of this.

Why?  Well, the net was going to fundementally change the world, but the

people that understood this (the techies) were all in the 18 - 25 range and

quite unsophisticated / uncaring about the ways of business.  However, the

world that would be most effected by this change (and had the $$$ to invest

in this change) were those in the business world, dominated by 40+

businessmen (and women) without the faintest clue of what was about to hit

them or how to communicate with these young "tech-geeks."

What was needed was a liason.  Someone who could bridge the gap and bring

the geeks and suits together to make something great happen.

Well here I was, a "techy geek" by undergrad training (Math, Computer

Science and Economics @ UCLA), and vocation (Systems Integration Consultant

-- a euphamism for programmer -- @ Andersen Consulting), getting the

training in the vernacular of business at Wharton, one of the better

business schools in the country.

I therefore saw myself as the ideal person to bridge this gap between the

techies and the suits.

All I had to do was figure out what concept to use.  I bascially did just

this during my two years at Wharton.  In fact, was my thesis

project for graduating with an MBA in Entrpreneurial Management.  And, my

partner and co-founder, Henri Asseily, was a class-mate who worked on the

project with me at school.

BK: What's Bizrate's model for revenue, and where do you see the company

going in the next year or so?

FM: basically sits at the online point-of-sale (the receipt page of

1700 vendors to be precise), inviting every single customer to provide

feedback regarding their experience.

The information is used in two ways that generate revenues:

i) It is packaged and sold back to the merchants and others interested in

e-commerce research, as the best marketing research available.  Afterall,

it is e-commerce research based on direct feedback from millions of online


ii) It is presented back to the consumers in the form of

awebsite that is the ideal place to start your online shopping because it

allows you to confidently select vendors based on the experiences of

everyone who went before you.  The revenue model for this site is manifold,

including cobranding of the ratings for third parties such as AOL, MSN,

Lycos, Go, etc, select sponsorships, and demand aggregation (coming in q2


BK: What difficulties, if any, did you find in getting the company started,

   finding venture capital, and otherwise getting BizRate off the ground?

FM: When we were getting started VC money wasn't as available as it is today.

Also, our concept of buyer ratings was a little ahead of its time.

Consequently, we had to bootstrap for almost two years (June 96 - May 98)

before getting our first round of VC money.

Once we had engaged VCs in discussion, the hardest part of securing money

was getting them to actually submit a termsheet.  This was accomplished by

getting multiple parties involved and letting each side know that there

were others interested and "moving fast."

BK:  What kind of advice would you give aspiring entrepreneurs in trying to

 start their own Internet-based startup?

FM: Most important of all: Do it!  The hardest part is simply taking the


My second advice is to leave yourself no back-up plan.  This sounds

dangerous, but I firmly believe that it increases your odd of success on

two fronts:  1) By putting everything / risking everything, you will have

all the incentive in the world to make it work.  When things don't go

exactly the way you plan them, you'll stick it out and find a way through.

2) When you hedge you are likely to be devoting some time to keeping your

hedge alive (i.e. the typical version of this is to keep your job and try

to be an "entrepreneur by night."  Well, guess what:  This most likely

won't work, because you are drained from your regular job and because you

are competing with thousands of people who have risked everything and are

working 24/7 on your idea!

Lastly: I would say that right now becoming an Internet entrepreneur isn't

even taking such a big risk.  I mean, the worse thing that can happen is

that your business doesn't succeed right?  Well, even in this dismal

outcome, more than likely you're left with a ton of Internet knowledge and

learning under your belt and are now in position to join another promising

Internet start-up!


** Forward this on to your friends! It's free!


Ticketmaster Online-CitySearch's Conn Talks


Charles Conn, CEO of Ticketmaster Online-Citysearch, talks about his firm's

plans for launching their services in 40 more cities by next month, and

moves into food delivery, video, bill paying, and more--and keeping

competitors out.

Investors Pay Idealab Fund High Premium


According to the Red Herring, the latest venture round that Idealab

Capital Partners has round came at a high price to investors--up

to 30 percent carried interest on its new $350M fund, according to

the Herring's sources. Apparently, only 20 VC firms are able to command

such a premium on funds, including Kleiner Perkins Caufield & Byers,

Accel Partners and Benchmark Capital--and none as new as ICP.

Net-based Entertainment On the Rise


Net-based entertainment is again on the rise, including Venice based

WireBreak Entertainment--Upside examines the business.

Vitesse Sets 2-for-1 Split


Vitesse Semiconductor, the Camarillo based IC manufacturer, has set a

2-for-1 split of its common stock.

THQ Releases Sinistar Sequel


Calabasas based THQ has released Sinistar: Unleashed, a follow on

interactive space combat title based on the original Sinistar. The

game takes the original elements of the game and transforms them into

a new 3D universe. Launches New Site

---- launched a new version of its site designed to provide digital

fingerprinting for computer files. The Westlake Village based company

is hoping to help users strengthen intellectual property claims and help

resolve IP disputes by providing an online way to register and digitally

fingerprint any computer file, including business plans, scripts,

inventions, tax records, and more.

Homestore Launches Remodel Site


Thousand Oaks based launched another site in its portfolio

of home related sites. is focused on home improvement and

maintenance for both consumers and professionals.

Digital Insight Signs MIT Federal Credit Union


Banking software and service provider Digital Insight announced it

had signed the MIT Federal Credit Union. The Calabasas based company

provides software and services for banks who want to offer Internet

banking to customers without investing in their own development projects.


*** Advertise here! Send an email to for a rate card.


Upcoming Events This Week

Full calendar at

** Am I missing your event? Tell me about it!

September 15-16, Los Angeles -- Softworld Manufacturing and Supply Chain

Expo. Expo and conference focused on manufacturing and supply chain

software and services. See

September 16, Beverly Hills -- Los Angeles Technology Fast 50. Recognition

by Deloitte & Touche of the fastest growing technology companies in LA,

Riverside, Santa Barbara, San Bernardino and Ventura counties. Contact

Ginnie Smutko (213) 688-1854.

September 16, Westwood -- "Windows 2000 and Office 2000". California

Society CPAs Westside Technology Users Group. See

September 16, San Diego -- The Use of Virtual Reality Tools in Psychology

and The Science of Internet Behavior. Brenda K. Wiederhold, Mark D.

Wiederhold. San Deigo Chapter Association for Computing Machinery See

September 16, Thousand Oaks -- "The World's Largest Parallel Processing

Program:Seti@home" Michael J. Ramey, PE, MCA Engineers. IEEE Buenaventura

Section. For more information contact or 805-486-8881

September 18, Irvine -- LARTA's "Digital Epicenter: Mining Knowledge and Making

Deals" Technology transfer officials gather for a discussion of digital

technologies in development, how to access technologies developed in

research institutions, how deals are done, licensing technologies and

success stories. Contact Nicole Huntington at, or

call (213) 743-4164.

September 18, Santa Monica -- WebGrrls: Krav Maga Self Defense Class. See

September 21, Los Angeles -- Zone Club meeting. Guests Sky Dayton and

Jake Winebaum, eCompanies. See

September 21, San Diego -- San Diego Internet Roundtable: iLounge

Conference. See

September 21, San Diego -- Microsoft Annual AITP Update. Association of

Internet Technology Professionals. See

September 21, San Diego -- "Visual Cafe" Steve Norton, SE Manager for

Symantec's Internet Tools. San Diego Java Users Group. Building,

deploying and debugging a distributed application using either RMI,

CORBA and/or EJB technologies. See

September 22, Los Angeles - 1999 Capital Sources Conference,

American Electronics Association. See

or call 310-563-1060 or email:

September 22, Los Angeles -- "From Aerospace Engineer to Entrepreneur."

John E. Lewis, PhD. , and Stephen A. Maas, Ph.D. IEEE Los Angeles Area

Consultants' Network. See

September 22, Culver City -- "e-Commerce: Strategic and

Tactical Implementation" Jerry Kalman of the Canaveral Group. California

Society of CPAs, LA Chapter. See

September 22, Los Angeles -- Web Fest '99. Venice Interactive Community.

Sponsor presentations and table-top demos, a mini job-fest, networking,

entertainment, food  and drink. See or

call (310) 452-2088.

September 23, Pasadena -- Transportation for the New Millennium: Clean

Vehicles and Mobility Services - CALSTART Advanced Transportation

Industry Conference. For more information contact: Sue Nelson,

WestStart-CALSTART 626/744-5680, E-mail:

September 23-24, Los Angeles -- Los Angeles Times Small Business

Strategies Conference. Speakers include Alfred Mann, Minimed; Jeffrey

Green, Ari Engelberg and Jim McDermott, of; Sky Dayton,

Earthlink Network; David Bohnett, founder, GeoCities. See

September 23, Los Angeles -- Tech Talk Live - A Series on High

Technology. Jon Goodman, EC2 With Panelists: David Hankin, Digital Coast

Roundtable, Rohit Shukla, LARTA (Los Angeles Regional Technology

Alliance) See

September 23, Irvine -- "How to Attract and Secure Angel Investors" Tech

Coast Venture Network. Panelists include David W. Berkus

Berkus Technology Ventures, Webb Castor, Jack Bunis Bunis & Associates,

and William C. Maurer, Romac Executive Solutions. See


Welcome to our newest sponsor!

Brobeck Phleger & Harrison LLP (

Also, thanks to our continued sponsors:

Koffler Ventures (

Deloitte & Touche (

Human Capital Group (

Two Roads Professional Resources (


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