Ex-Microsoftie opens doors to digiMine.com

BELLEVUE – A new Bellevue company led by a former senior researcher at Microsoft is on the fast track to revolutionizing data mining. While CEO and co-founder Usama Fayyad left Microsoft.ccom has raised approximately $5 million from angel investors and already employs more than 20 people.

Almost as soon as Fayyad walked away from a rewarding position in Microsoft’s research labs (and some unvested stock options), he was swamped with offers to invest in the company. Originally intending to raise $2 million, he admits the company overshot its target for its first round.

Data mining is a highly technical and expensive process in which businesses sift through their databases of Web site and customer information to highlight patterns on usage and trends, and then use those patterns as intelligence to plan marketing and development strategies.

DigigMine.com takes the same idea, but targets smaller businesses. The problem has been scalability. To successfully “mine” a large database for useful patterns, it required dedicating computing power and people with database and statistical expertise to the task.

“Up until five or six years ago, I would wager that businesses never used their databases,” Fayyad said. Companies couldn’t devote enough resources to the task, and others would gradually take higher priority.

“You always have better uses for your IT guys,” Fayyad said.

digiMine.com is developing software applications to allow users to easily and quickly find the nuggets of gold in large databases.

Whereas Fayyad’s work at Microsoft focused on developing software for large corporations with the trained IT staff to devote toward data mining, digiMine.com is targeting the small and medium-sized business market, where someone like a Web developer or a marketing manager might have access the data.

In addition to being easy to use, digiMine.com’s products will also be less expensive than corporate services. Initially the software will be available as a Web-based application, but the architecture is flexible enough so it can be easily adapted to a customer’s needs, accessing it through Microsoft’s Access database for PCs, for example. The company is expected to open its door later this week and launch its product in September.

Fayyad and his co-founders, executive vice president of sales and marketing Nick Besbeas and chief operating officer Bassel Ojjeh, developed the idea while working together at Microsoft, where Besbeas led market research for desktop and server applications in the Applications Division and Ojjeh oversaw development of Commerce Server 4.0 and built Web databases for MSN’s early Internet excursions.

Before joining Microsoft in 1996, Fayyad headed the Machine Learning Systems Group at Jet Propulsion Laboratory, the think tank of the astrophysical and aerospace industries managed for NASA by the California Institute of Technology. At Microsoft, he worked in the Data Mining and Exploration group to develop data mining tools for corporations with large databases.

The data warehousing and business intelligence market is expected to reach $50 to $70 billion by 2002 according to analysts at IDC and Forrester Research.

“We would easily have 5 percent of that market within two years,” Fayyad said. “Of course, that’s dreamland, right? It assumes we execute and all that good stuff.”

But Fayyad is confident, and so are his backers. The list of investors in digiMine.com reads like a list of all-star players; Sam Jadallah, managing director of Internet Capital Group in Bellevue, Pete Higgins of Second Avenue Partners and a former group vice president at Microsoft, Nick Hanauer, chairman of Seattle-bassed Avenue A and Gear.com, Keith Grinstein, vice chairman of Nextel International and a director of Madrona Investment Group, former CEO Mike Slade of StarWave, and Stanford University professor Rajeev Motwani. Also in the round are Silicon Valley Angels, Deutsche Bank Technology Fund, Cedar Grove Investments and Kellett Investments.

Fayyad admits was taken aback by the surge in investor interest, but he has readily adapted to his new home outside the isolated research labs of Microsoft and JPL.

“It’s a different kind of buzz,” he said. “ If you stumble, it’s death… I like that risk.”

“It’s sort of brings back the thrill of the hunt,” he added.

By: Chris Winters

Source: Eastside Business Journal


Leave a Reply