In this segment of Lessons Learned, Bambi Francisco interviews Tim Musgrove, CEO and founder of TextDigger, a company developing advanced semantic solutions for the Web, including hosted semantic search, automated content tagging and topic generation, and optimized keyword generation.
The San Jose, Cali-based startup was founded by a group of former CNET employees and executives who developed patented linguistic technologies that, today, are used to enhance the content on CNet.
BF: You have been an entrepreneur since 1999 when you started SmartShop and then you sold it to CNet in 2002. So you definitely went through the boom and the bust. What was your biggest lesson you learned through that experience?
TM: What we've learned with SmartShop is that there are companies that will always appreciate innovative technology and a good team that can move it forward even in a down market. So we were able to get SmartShop sold during the worst of times for a pretty good deal to CNet which made a great place for us to make a great home and continue our work.
BF: Undisclosed, right?
TM: The amount of it was undisclosed but the investors were happy. Some of the same investors are with us today in Digger. So they were happy about the deal.
BF: So they have confidence in you. Search has evolved a lot and in some cases it has not evolved. What have you learned watching other founders in this search space? What have you learned from their mistakes?
TM: I think that everyone underestimates how long it's going to take to build a better mousetrap when it comes to search and people tend to blow through their money too fast. So I try to earn a reputation as an entrepreneur among investors that I'm very frugal. I can keep a low overhead so that they can feel comfortable during times like this to actually invest in the company. And we are realistic. We are going to launch this aimed at power users because there is going to be a learning curve. I don't think the next generation search tool is going to be considered a search engine. It's going to be a very different experience.
BF: What have you learned dealing with the media companies and publishers?
TM: The media companies are getting more savvy all the time about the Internet. But, many of them still have a long way to go.
BF: They've been in their own little world for a while. Please share a couple more of pieces of advice about working with the media.
TM: I think that this downturn actually represents opportunity for companies like us that can offer scalable automation of managing content in a way that's more affordable for companies than using many human beings to tediously go through manually tagged content. I actually do not feel scared about what's going on. I think that the economic hardship of the whole environment is actually driving some of my customers to me. And I imagine that there are many startups that can play that angle if they orient their product line toward automaton and scalability.