Interview with Sean McDonald, Jute Networks

Sean McDonald is founder of Jute Networks (, which is in a startup developing highly visual, graphical tools to help people use their professional networks and connections to further their business. Sean is looking to locate his startup in the area, so we sat down with Sean to learn more about the company's software, as well as what brought him to the Los Angeles area.

What is Jute Networks?

Our company, Jute Networks, is a startup that is about a year and a half old. We build web software that improves the ability of people to manage their networks. We're specifically not a social network. We have a tool that gives you the ability to manage, leverage and grow your professional network, designed for professional service providers and people who live or die by their relationships. That includes large nonprofit and fundraising professionals. The software really has three technology components. One is the database system that allows you to integrate lots of different data points, so you can take your address book, CRM data, your LinkedIn network, and match them together. You can use that to build out your information basis in your network from those aggregate data sources. You can even use third party data like socalTECH, and you can take that data and integrate it. Another part of its is an NRM, a network relationship manager, which is a tool that helps you keep track of relationships and analyze and access those relationship--so you can figure out who knows who, and how. The simple version is you want to meet someone at a specific venture capital firm, you can figure out who you know who would know that person. The same thing, if you're looking for a donor at a nonprofit, or if you're looking for a next client if you're an attorney. It tells you who you know that knows your next client.

You can also store information in there. One interesting thing about Jute, is we've decided to make our interface data visualization driven, so rather than tables, charts, and spreadsheet/text driven system that you see in most relationship management software, we provide a visual interface that does a couple things. One, is it keeps you in a context-rich user experience. That means, you pull up a client record to find their phone number and make a call to them, you don't just see their name and phone number. That doesn't give you anything to talk about. What you see instead is all the information about their relationships. If you're an attorney, you want to see who your client's clients are. At the end of the day, that's what they care about. Their relationship with you is not as important as the one they have with the people that write them checks.

Another thing is visualization across the board helps to see things they don't know that they don't know. Many times people have extraordinary amounts of relationship capital inside their organization. An example is a law firm, inside of a firm with a dozen attorneys, they are rich with relationships that they are hard pressed to share with each other. The typical thing that happens is someone says -- one of my clients wants to sell a multimillion dollar project to this company -- so the attorney asks around the firm, sends dozens of emails across five people--do we know anyone at this company? Someone at this firm has established relationships at that company. It's very time consuming and inefficient. Using a network relationship manager, it's much quicker to get that kind of information.

Is this something people can go to your website and buy?

Sean McDonald: Not yet. Right now, we serve a group of select clients, and provide slightly customized solutions for those clients. In the coming weeks and months we'll be rolling out a beta version. People can see a prototype at our web site, and videos of our prototype. People who are really interested can get access to that prototype if they contact us.

Tell us a bit about why you're in Los Angeles, and what you're looking for?

Sean McDonald: I came to LA, because we decided that the future of our company would be with working with established software companies who clients are looking to do what we do. They are looking to take existing data they have, and get more value out of it, and to manage, leverage, and grow their professional networks. Although we provide these solutions to clients, and what we'd like to do is scaling the solution through strategic customers, like CRM providers. People who have great data sets, and established customer relationships. The second part of this, is we started this company in Asheville, North Carolina, which is a small town in the western mountains of North Carolina. The opportunities for growth started to become limited, it's a small market, so we really wanted to relocate to an innovation hub--and certainly the LA area has credible opportunities to connect with leaders in web software, and every innovator you can think of, and forward thinking venture firms. It was a pretty clear choice to start here.

What did you hear about LA that made you think of it as a place to look?

Sean McDonald: A lot of people told me that LA wasn't nearly as bad I had heard. That was part of it. I did my homework pretty well before coming out here, had a couple of friends who had come out this way. It was a combination of factors, one we knew we wanted to be someplace clearly one of the top five innovation hubs. It was Boston/Austin/Palo Alto/LA, maybe Atlanta. We knew, culturally, that we wanted to be some place where there were people really focused on user experience--user design, interactivity--which makes the list smaller. We then narrowed it down to Palo Alto or LA. We're now checking stuff out and trying to figure out which one is a better long term home. LA has been great, and to the credit of some of the folks we have in the East Coast, in the venture space--professional service providers--they encouraged us to come out here, saying that there were lots of hot startups here, they aren't getting as much publicity in Silicon Valley, but there's lots of credible stuff happening here and it's worth spending some months here checking it out.

How are you funded?

Sean McDonald: We had a friends and family round, and we've raised some angel money. That was enough for the first version of our software, and we were also the recipient of two economic development related grants out of North Carolina. One was a loan for the very first stage of the startup. We also won a grant out of NCIDEA, a group in North Carolina designed to foster innovative startups in the region. They have you write a grant and send you into a venture capital firing squad, which is a group of VCs, engineers, and other business guys and was a lot like a firing squad. I'll give them credit for getting me ready for all the pitches I've had to give recently. So we got the grant, and of something like 31 grants, we were the only one to come from western Carolina in the history of the grant, and only the second outside of the RTP area.

I should also mention one of our angel investors. He's the best angel investor in the world, his name is Rajeev Kulkarni, who was part of a startup here in the LA area, 3D Systems, which does three dimensional printing. They really pioneered that technology. Rajeev was an early member, now a VP with them, and is an active angel investor. Much to the fortune of North Carolina, 3D Systems moved to the Charlotte area and Rajeev is now active in the angel investing area in North Carolina. Not only for our company, but for other companies, he's been a godsend. He not only has developed a sophisticated understanding of the startup world, but he's helped an area which is really an emerging startup area -- we need about 20 more of people like him. He's a person who validated our business and told us to look at Southern California.

What's next for your company?

Sean McDonald: We're working on the next version of our software, which will be publicly available pretty soon now. We'll be announcing a public beta, which will exciting. That will be the first time the general public will have access to our software, which has previously only been available through direct sales engagement. I'm personally excited that people will be able to go to Jute Networks and get their hands on the software, even if it will be a lighter weight version without some of the advanced features. We will also be spending lots of time knocking on the doors of companies that have the kind of data we like working with, that have these incredible data sets. One things about the software industry now, is we have way more data we know what to do with. It's extraordinary, over the next 5-10 years we'll see the ability to generate data will become secondary to making use of the data you already have. That will continue to create more opportunities for us.



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