An Intelligent Investment

Neil Weintraut pioneered and led the Internet practice at Hambrecht & Quist, underwriting such Internet companies as Netscape, UUNET, Lycos, c|net, Check Point Software and VocalTec. From there he entered the venture capital arena, where he has amassed two funds with a total of $150 million in capital.


How would you describe the field of business intelligence?
A: There are three areas of business intelligence. The first is the Business Objects and Microstrategies of the world that sell technology to companies that use it internal to their operation. Both of those companies were public long before the Internet came about.

The second area deals with the front line on the Internet such as e-tail sites. WebTrends is a good example of that. You can find basic things, such as that some pages are never visited. This is how you optimize operations. This is very meaningful, because you can measure in terms of click-through or improved volume.

The third area includes a variety of segments relating to dataveilance. The two primary segments are the consumer and the corporate spaces. Right now there are proxies of that with companies like Companysleuth.com that allow you to monitor what is going on with a company on the Web. Services like that can be interesting, but it has to come with a broad-based appeal, so it can be a multibillion-dollar company.

Q: What kind of investments are you looking for?
A: We are looking for investments with the potential to be multibillion-dollar companies. Business intelligence lends itself to being a field with thousands of small companies. Our firm, and I think VCs at large, are looking for the ones that target hard, tangible business problems, as opposed to the soft problems--specifically, technologies that enrich a company's sales.

Q: Do any other specific areas interest you?
A: Supply-chain automation interests me. There again, you can see very direct contributions to the business--either material changes to the time of production and delivery of production or to measure delivery of product, with Dell Computer being the ultimate model of build to forecast. Another hard area is customer support. A company literally knows how many hours they have spent dealing with the customer.

Q: Are there any areas of business intelligence that you shy away from?
A: When you get into areas like knowledge management, business intelligence becomes much more ethereal. The sales of these types of applications are very problematic. They tend to be company-specific in terms of their process, and they often solve problems that are too ethereal or narrow in market scope. But there are clearly some companies in this area that are interesting.

Q: What is the major concern for companies developing business intelligence systems?
A: There is a tendency to get carried away with the romance and power of the analytical abilities of business intelligence. There is a fine line between microanalysis of information that might require three months of integration and just using our instincts.

Q: Why is WebTrends succeeding?
A: WebTrends has specifically zeroed in on the activities that are required to run the business. Even queries like, "Does the Web site run properly?" or "Are there any broken links?" are very important. They can monitor trends and do analysis as a third party. They are generating the data for you. The key is having a very specific deliverable that is either broad-based like Business Objects or that is specialized in a big market like WebTrends.

Q: Why make Business Objects so useful?
A: Business Objects is really an internal framework, whereas WebTrends is very external. Business Objects is actually a business intelligence-oriented data-querying tool. The idea that you can define objects or entities that mirror some business concept like a product category makes it easy to run reports against it. You just specify that report in terms of product categories, rather than writing software code to extract the category out of the database.

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