Israel’s SiSense is crunching the numbers and analyzing them at small- and medium-sized businesses and in divisions at Price Waterhouse Coopers, Internet giant Yahoo and discount retailer Target.
By Brian Blum
A hot Tel Aviv-based start-up called SiSense plows through massive amounts of data about your business to give you actionable answers in days rather than months, as in typical business intelligence solutions. Let’s say you have a nice little website, and you want to know what your users do when they come to visit. Your site gets 10,000 visitors a day and the average person does the following: clicks to view several different pages; watches a video; fills in a form to receive more information.
That may not seem like a lot of information to crunch, but if you do the numbers, you’ll see that you’ve created a spreadsheet with 50,000 rows of information per day. Multiply that by a month and you already have 1.5 million data points to make sense of. And that’s for a small site. Now extrapolate to a major consumer Web brand and before you can say ‘data overload,’ you’re swimming in it.
Not surprisingly, an entire industry has developed around helping companies to manage the information they need to make critical decisions. It’s called ‘business intelligence.’ The problem is that to manage the sheer mass of numbers generated, it can take weeks or more to process. In the world of the real-time Web, where sales and marketing questions need to be acted on fast, that’s not good enough.
And that’s where SiSense comes in. The company has just raised $4 million on top of a previous angel round of $1.5 million. Its database technology called Elasticube can plow through massive amounts of data and provide quick analysis and solutions for your business,
Fast answers, easy set-up, affordability
SiSense can do this, explains CEO Elad Israeli, because its technology was built specifically from the ground up for business intelligence tasks. "We know how to talk to the database sources that are most likely to be used," Israeli relates. That data could include information from CRM (Customer Relationship Management) systems that helps sales staff to track what their customers are buying, or detailed website analytics, including how well a pay-per-click Google advertising campaign is doing.
"There’s a lot of secret sauce going behind the scenes," quips Israeli, who writes an interesting blog on business intelligence at Elasticube.com.
A typical CEO wants fast answers, but even more important to the IT guys in the back is ease of set-up. Typical business intelligence installations can literally take months to perfect. "It’s complicated and expensive," Israeli explains. "That why business intelligence hasn’t really been able to expand beyond the Fortune 500. Smaller companies don’t have the resources or patience to wait for ROI (Return on Investment) years down the line."
However, SiSense promises that a client can be up and running with its number crunching technology in days, if not hours. An ordinary ‘power user’ who knows his or her way around software with a fairly robust PC can set it up, skipping the frequent backlogs in the IT department.
That opens up the market to small- to medium-sized businesses; indeed, one of SiSense’s clients is a three-person Internet marketing firm that before SiSense would be crunching the numbers from a bunch of Microsoft Excel spreadsheets.
Pricing also makes a big difference. A single user license starts at $50 a month, growing according to the number of ‘seats.’ Depending on how many staff members will be using the product, a company may opt to buy a one-time license, which can range from $2,000 "to several dozens of thousands," according to Israeli. Either way, it’s a far cry from the $100,000 plus that a Fortune 500 company may invest in a non-SiSense business intelligence solution.
The SiSense offering is also unique, says the company, in that it is downloaded over the Internet. There is no long sales cycle with business intelligence experts pre-selling and then installing the product. SiSense even offers a 30-day free trial.
SiSense has broken into the big time, too. Divisions at accounting firm Price Waterhouse Coopers, Internet giant Yahoo and discount retailer Target all use the product. In the latter’s case, SiSense allows sales managers to monitor what their account managers are doing. They can see who’s closing in on which sales, what will need to be done to meet the overall monthly target and the potential size of each deal.
SiSense customers can then organize the data in a variety of user-friendly ways – from lists to charts to customizable dashboards. Israeli calls it a "360 degree view of all of the organization’s data in one place."
SiSense’s technology didn’t just sprout up overnight. The company’s fortunes have mirrored the overall high-tech industry in Israel over the last decade. Along with co-founder and current CTO Eldad Farkish, Israeli opened the company 10 years ago straight out of his stint in army intelligence, with an initial investment from Farkish’s father, successful Israeli businessman Eli Farkish.
The fledgling company did manage to reel in one (impressive) customer – Microsoft – but that was it. Then the high-tech bubble burst and raising money for business intelligence – "which no one in Israel knew anything about back then," Israeli recounts – became impossible.
The two parted ways and found other jobs. Five years later, they met up and decided to start again. There was still some investment left, so Israeli and Farkish began coding in total stealth mode. "It took us four years to build," Israeli says, "and we had no customers during that time."
The new SiSense was released at the end of 2008 with just a front end and none of the sophisticated database crunching technology. A year later, the full solution was released and, with the venture capital economy recovered, along came the new $4 million injection of capital. SiSense now has 100 customers and "high aspirations," says Israeli.
The latest investment will lead to Israeli’s departure from his home country. In the coming months, he will be moving to Silicon Valley to open a US headquarters for SiSense, where he hopes to double the company’s current staff of 10 members. R&D will remain in Israel.
More staff and fresh money don’t mean the business model will change. "We’ll still sell exclusively over the Internet," promises Israeli.
Farkash of ICQ
It’s that combination of staying lean with enormous upside that attracted the new investors, which include the Israeli Genesis Partners and US-based Opus Capital. How big is the market? A quick Google search brings up 2.5 million results. More to the point, Israeli refers to a Swedish business intelligence firm, QlikView, which went to IPO a few years ago and is now valued at between $700 million and $1 billion.
For smaller companies, the temptation may be to just use the free Google Analytics. Isn’t that enough to track what’s going on at a website? "It’s a start,” Israeli admits. "But Google doesn’t keep track of information on a user level. You can’t say this user went to the pricing page and then bought that product. It will only tell you the end points."
What about doing business intelligence over the cloud, all the rage these days in Internet products? While there are some companies in this space – Israeli refers to Tibco, Gooddata Birst and PivotLink – he claims that ultimately it won’t work; the data needs to be local to process fast enough.
External hosting would only exacerbate the bottlenecks that internal IT departments experience. Plus a lot of the data a company generates is inherently private. "You don’t want to store it somewhere outside of the company," Israeli says.
Given that SiSense’s first round of investment was Eli Farkash, father of the company co-founder, we wondered whether the senior Farkash had plans to challenge Yossi Vardi, dean of angel financing in Israel, who backed his son’s startup ICQ in 1996 which went on to become one of Israel’s earliest Internet firms to be bought by a US giant – in this case AOL.
Israeli doesn’t think so. "This investment really had nothing to do with family. He’s just the biggest believer in the company."