Local startup carves niche in emerging field of ‘data mining’

KIRKLAND – For a man born one block away from the ruins of Carthage in modern-day Tunisia, Usama Fayyad doesn’t come across as a latter-day Hannibal crossing the Alps to attack an unsuspecting Roman Empire.

At 6-foot-5, he more resembles Mr. Clean than a battle-hardened entrepreneur. Fayyad is soft spoken, good-humored and articulate on subjects close to him.

The subject closest to him is data mining, and his five-month-old Kirkland company, digiMine.com Inc., is poised to take off and lead the hot new field.

Imagine an online retailer that, instead of having a few metrics about online shopping habits – that sales of books peaked in July for some reason – that the company could determine, from the data in its own database, that July book sales peaked at the same time beach blankets did, and that the same correlation could be observed with books, tea cozies and sawdust logs in November. Marketing managers could have a field day with that data – if they could find it.

Analysts from Forrester Research and International Data Corp. have estimated the market for data warehousing and business intelligence will climb to as much as $70 billion by 2002. There are already a number of companies that sell data mining products: Fayyad estimated something in the neighborhood of 300, including industry giants IBM and Microsoft, Fayyad’s former employer. He also spent time working on data mining tool’s at NASA’s Jet Propulsion Laboratory.

Most data mining products are targeted toward users with a high degree of technical knowledge. In fact, data mining is the provenence of a rather exclusive club of scientists and information technology professionals.

“There are not enough people out there who understand data mining,” Fayyad said. A number of companies, such as Clickstream Inc., do reporting, but that involved customizing the clients Web site in certain ways to feed specific bits of data to the reporting company.

“That’s interaction with the consumer. That’s stuff we don’t want to be in,” Fayyad said.

DigiMine is designed as an application service provider. The company pulls raw data off its customers’ databases, crunches it, and spits back a report on what happened on the Web site that day. Even non-technical marketing staff would be able to understand it; the words “data mining” or “data warehousing” never appear in those reports.

The need for that kind of simplicity is because of the prohibitive costs of mining data in the first place, something digiMine seeks to overcome by making its services affordable to large and small companies.

A typical large company might invest hundreds of thousands in an enterprise-scale data warehouse, for example. When that data warehouse is built, the customer usually doesn’t know how to use it properly, or how to properly feed it data. As a result, the data becomes stale almost immediately, and when that happens, the marketing department loses interest. Without marketing behind it, the budget gets cut and the project dies.

“I used to think my best customer was going to be a new dot-com that didn’t have data warehousing solutions or data mining,” Fayyad said. “What I found was my best customer today is a customer that has already spent a couple million dollars on data warehousing solutions and learned the bitter truth, which is they can’t staff (it) enough to keep this thing running correctly.”

That isn’t the only surprise Fayyad has had in his company’s infancy/ Three weeks after starting the company in March with his fellow Microsoft alumni Bassel Ojjeh and Nick Besbeas, digiMine raised $5 million in an initial round of funding from a number of high-profile venture outfits, including Second Avenue Partners and Deutsche Bank Technology Fund.

Fayyad had originally planned to raise only $2 million. The company has since raised an additional $2 million in convertible debt toward a second round to beef up its employee’ benefits package.

Fayyad also in March had thought the company would have 50 employees and between eight and 10 beta customers by the end of the year. DigiMine now employs 60 people, and 20 companies are taking part in the beta trial. The company will commercially launch its products later this month. Already digiMine’s computers are crunching between 40 and 50 gigabytes of data daily for its beta customers.

Conquering the world

As a child, Fayyad moved around extensively. The son of a United Nations ambassador, Fayyad lived in France and has a spoken French since age 5, developing an affinity for the Belgian comic strip Tintin. (He keeps a model of Tintin’s rocket ship in his office; it is said to have been a gift to Microsoft chairman Bill Gates by a French visitor, and was eventually rescued from the garbage and given to Fayyad by someone who knew him as Microsoft’s resident rocket scientist).

Fayyad also lived in Italy, Algeria, Egypt, Sudan, Jordan, Yemen, and Dubai, coming to the United States to study when he was 17. He didn’t get his first full time job until he was 27, though. At the University of Michigan he earned two bachelor’s degrees, two master’s degrees and a doctorate in fields ranging from mathematics to computer science and engineering.

“I decided this was a good gig,” Fayyad said. “I was going to be a student forever.”

While at school, he spent his summers doing research at some of the top facilities in the countly, including General Motors, GTE Corp., and Jet Propulsion Laboratory. Working at the latter led to his first job out of school, building data mining tools for JPL’s archive of 30,000 images of the planet Venus taken by the Magellan spacecraft, enough to fill 100 CD-ROMs.

Fayyad stayed at JPL until 1995, when Microsoft came calling. At first, he was unenthusiastic about working for the company that made Word and PowerPoint. But Microsoft flew him and his family up north first class, and Fayyad spent one day on campus, meeting with product group instead of the research department. It was enough.

“It blew my mind,” he said.

In particular, he was impressed with Microsoft’s SQL Server product, a corporate database and data analysis tool that had been in development for seven years but had yet to show any revenue.

“I did not think at the time that Microsoft was able to do a long-term commitment,” Fayyad said. He joined the Redmond software giant’s research department in January of 1996, where he formed and headed the Data Mining and Exploration Group.

Now on his own with his own company, there is a whole new world to conquer. Despite his gentle-giant demeanor, Fayyad gets a thrill from the frenzied pace of life in a startup, with all the risks involved. He offers a quote from Hannibal, who when told of the insanity of trying to cross the Alps in winter with his army and elephants, is believed to have said, “Either there is a way, or we’ll make a way.”


Headquarters: Kirkland

Year founded: 2000

Number of employees: 60

Web site: www.digimine.com

Revenues 2000: none

Profitable? No.

Funding: $7 million total from Second Avenue Partners, Deutsche Bank Technology Fund, Cedar Grove Investments, Kellett Investments and individual investors, including Sam Jadallah of the Internet Capital Group and Stanford University professor Rajeev Motwani.

Description: DigiMine.com Inc. provides data mining services for business that seek to build customer profiles and target marketing efforts based on raw data in their corporate databases.


Age: 37

Title: President, CEO, Co-Founder

Hometown: Carthage-Hannibal, a suburb of Tunis, Tunisia, but he has lived in the U.S. since age 17

Residence: Mercer Island

Education: B.S., electrical engineering and communications theory; B.S., computer engineering; M.S., computer engineering; M.S., mathematics; Ph.D., computer science – all from the University of Michigan.

First job: worked summers in research labs with General Motors, GTE and Jet Propulsion Laboratories.

Other significant work experience: researcher for Jet Propulsion Laboratories, Pasadena, Calif., 1991-1995; senior researcher and leader of the Data Mining and Exploration Group, Microsoft Corp., 1996-2000

Hobbies, other interests: sleep, water-skiing at 5 a.m., boating

Family: wife, Kristina, sons Ali (7) and Zayd (5), daughter Dima (2).

Latest book read: ‘The Monk and the Riddle,’ by Randy Komisar and Kent L. Lineback

Motivational quote: “Either there is a way, or we’ll make a way.” Attributed to Hannibal when he was told it was crazy to cross the Alps in winter to attack Rome.

PHOTO by Steve Shelton: Usama Fayyad is chief executive officer and president of digiMine.com Inc., a new and growing entry into the emerging field of ‘data mining.’

By: Chris Winters

Source: Eastside Business Journal


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