Human powered web directory

Scott Potter is a rare bird. Four years ago, he attended to Yahoo!'s IPO, while working in the Silicon Valley at a leading law firm, Venture Law Group, specializing in technologies. Later, he attended to the acquisition of WebTV by Microsoft. What a track record.

However, this is notw hat marks him out. Having handled the legal aspects of the new economy, Potter put his efforts into management. In 1997, he was appointed vice president for business development at Worldres.com, at the time a small start-up with an innovative idea for marketing tourism on the Net. A year later, he was already senior vice president of a developing tourism empire.

This still does not render him exotic. What does is the fact that since the beginning of the year Potter, only 31, chose to make another change in his career. The position: CEO; the company: Quiver, which is developing a human powered directory; the location: Ramat Gan; the objective: to conquer the world a third time. This is certainly strange.

In actual fact, Potter has not really been obliged to change his home address to Abba Hillel Street in Ramat Gan. Around the time of his appointment, Quiver set up head offices in San Francisco, keeping the development center in Israel. Nevertheless, Potter will find himself eating lots of falafel in the near future.

Users know what's best

Quiver was set up in 1998 as Nectaris. The name was changed recently. The company developed a unique search engine of consolidated bookmarks, i.e. the engine takes recommendations on search results from users personal bookmarks. The more a certain site appears in users' bookmarks, the higher grading it will receive in its category in the Quiver portal. The portal develops a menu tree, and the branches are filled out according to the definitions provided by the users themselves.

The engine is unique in that it continuously monitors surfers' habits. It is not sufficient for a site to appear in a bookmark, it is accorded additional points for being used by numerous surfers.

Why is all this necessary? The words "Search Sucks" which appears on the company's official folder says it all. The difficulty in searching for information is the reason for a human directory to be developed, and the audacious approach is the reason for taking someone like Potter to head the company.

"Globes": What's behind the idea of creating a human powered directory and consolidating all surfers' bookmarks? Today's approach is just the opposite - personalization.

Potter: That's true, but we believe there's two serious problems with the Internet: one is the matter of broadband, and the other is that there's too much information. Many companies have tried to solve the problem of searching for information. Search engines can be divided into several generations: in the first generation there were automatic engines, which scanned all sites on the receipt of a key word. It was a computer-based method. Later came the human-based approach. Yahoo! is a good example of this generation. It involves a group of people scanning the Internet and defining the sites.

"Now, take me as an example. I'm crazy about European football, and it's a problem for me in the US to follow events. IN the six or seven years in which I have been surfing, I've acquired about twenty bookmarks of football sites I choose to visit. I believe that, if you take my bookmarks, along with the bookmarks of 500 other football fans, and categorize them with the help of a smart algorithm, you'll find the best sites. These sites will have been chosen by users, not by a global editor at Yahoo!. The philosophy, therefore, is to build an engine for consolidating this human knowledge."

But if you take my three favorite sites, your three favorite sites and the three favorite sites of all your surfers, you will be flooded again with information.

"Not if you build an intelligent logic tree. You start with 300 categories, including sport, for example, and you divide the category into football, basketball and hockey, or English football and French football, and so on. It's a division that occurs with time. Moreover, I will surely find some duplication between your favorites and mine, which will continually re-appear because they're the interesting ones. I don't want to give you all the European football sites, just the ten most popular."

Aren't users worried about your monitoring them?

"That's an important issue and we gave it a great deal of thought. We regard privacy as pivotal, and we do the monitoring in a completely anonymous way. We're not going to sell the information to anyone, I don't care who visited which sites, I only care about the site visited. The information provides a methodical base, but we're not interested in the information itself. "

But companies like Yahoo! can direct surfers to certain commercial sites, against payment, while you are limited to users' choices.

"What you have just said about Yahoo! is not entirely accurate: they never give preference to a site based on payment. In any event, our model is based on selling technology. We are negotiating with several "vertals" (vertical portals, i.e. focusing on one field) interested in installing directories in their fields. They don't want to invest in an in-house editing team, and so we're discussing with them installation of our engine under their name, with their regular users building their directory for them. It will be of tremendous value for them.

"We will host the directory, presented with their brand name. More importantly, all this information will trickle into our general directory. This way, they will receive a specialized directory and we'll succeed in broadening and improving the quality of our directory."

You left Worldres.com which was a huge success, and went to a tiny start-up, just starting out. You're not the only one to do that. Explain what prompts you to make such a move.

"In my case, there are two explanations. One is the ability to get up in the morning and feel that I have a great technology, there's a huge market out there, and I must go and understand what can be done with it. The other is economic. I regard such a company as an opportunity. My attitude is based on a number of criteria: the size of the potential market and who has already invested in the company. In this case, the Hummer Winblad Venture Partners fund invested in Quiver. The fund is a large and respectable fund, and it is they who brought me to the Quiver."

I have the feeling that in two or three years when Quiver becomes a great success, you will get up and move on.

"Six months in Internet terms is like six years. I think in terms of three months. In the company we also set goals for two months. In effect, we run a marathon, but in short sprints. I don't think in terms of three years - it's too far into the future.

At Worldres.com, for example, an excellent company which I still believe in, the business became something to be taken for granted. When I arrived, the company had two business partners and 50 hotels. When I left, we had 1,200 business partners and a list of 12,000 hotels. All this now needs to be operated by the system. It doesn't interest me. Look at Jeff Bezos, if Amazon had continued to sell only books, he would not have stayed. He launches a new company in a new market every year."

Audacity is good

US managers mostly regard Israelis as a different species. I don't know if this is a good thing or a bad one, but we are different. What does it feel like to work with an Israeli company and with Israelis?

"It's great. I heard the usual stereotyping: Israelis are aggressive, very opinionated and honest. That's exactly the way I am. We sat at a restaurant yesterday until after midnight, arguing about company strategy, and this morning everybody arrived at work revitalized and full of energy. I love it. It's good that we argue. I don't want to manage people for whom I decide what they should do and they simply do it. If I make stupid decision, I want people to tell me it's stupid."

You talked of short Internet timetables. However, one of the results is that it is difficult to determine when a start-up is dead.

"That's a difficult question. The nice thing about the sector, particularly in the US, is that it's relatively easy to raise capital, which gives plenty of room for making mistakes. You have to work by trial and error. There's little time to ponder when it comes to the Internet. In fact, if you deliberate for two hours or two weeks, you more or less reach the same conclusions. So you have to go and try, but you must build your self a mechanism for learning from the process and improving.

"You have to know how to make many mistakes, recognize them and correct them. It's a balancing act. In brief, the answer is that a company is dead when there's no more money to continue making mistakes."

Published by Israel's Business Arena on 13 March, 2000