The general idea was to develop tools based on advanced technology that could provide information by analyzing discussion groups, forums, communities, chat rooms, blogs, and online responses. Start-up Trendum, founded four years ago with private financing from former Gallup Israel founder and CEO Jacob Levy and his son Ori, is now seeking external financing. Trendum wants to raise $3 million from Israeli and US venture capital funds, and is already holding negotiations. The Levys have already invested $200,000 of their own money in the company, which they fully own.
In its first two years, Trendum was based in the family's garage, while Ori worked on the product with three programmers. The general idea was to develop tools based on advanced technology that could provide information by analyzing discussion groups, forums, communities, chat rooms, blogs, and online responses. Ori Levy said, "We realized that millions of people talk about products, brands, programs and stars, constituting a huge source group that no one knew how to mine for information."
He cites an example. "Before a meeting with Time Warner Inc. (NYSE:TWX), by chance we had prepared a test on the popularity of Britney Spears. Our analysis showed that her popularity was falling, which surprised the people at Time Warner. A month later, her fans threw tomatoes at her, and two months later she announced that she was retiring temporarily.
"Our engine could also analyze opinions and explain the reason for the dislike. In the case of Britney Spears, her fans stopped loving her because she was no longer a virgin, she smoked, and she has a contract with Pepsi (NYSE:PEP). Our tool can analyze target audiences in many fields better than any focus group. We don’t ask people, but analyze their opinions, freely put in writing, on the Internet."
"Globes": How do you do it?
Ori Levy: "We examine millions of opinions on specific websites, and look for content clusters, which we then analyze."
How can you characterize an audience that does not always give real information about itself in forums?
"Our tool can understand different users in-depth, because the technology engine also examines the speaker's style, and not just the words and conjugation. We can figure out if it’s a man or a woman, and the person's age group. The engine recognizes style and expressions characteristic of age groups. Furthermore, the communities' members don’t answer every question put to them. Each community has its own language, and they very quickly identify intruders."
Ori Levy says the engine does not contain any element that infringes on copyrights, because the material it mines is from freely available texts.
What are the product's possible applications?
"The product can be used in many fields, and we'll have to pick the ones to focus on. We've been working with media, entertainment and products companies until now. We examined audience responses to new programs for television companies, and we examined a product line for Estee Lauder. We examine almost anything, from advertising campaigns to new products, programs, movies, and even the popularity of stars."
What is your business model?
"Providing services. A company asks us to examine a particular subject. We check it, we send a report, and they pay us for the service."
Bush haters
Trendum's software has another application: the Global Hatred Index, Jacob Levy's pride and joy. He has already presented the index at a UN conference on dismantling sources of intolerance. "We examined two million messages, which the hatred index analyzed. We tried to decode the components of anti-Semitic and anti-Islamic hatred in the US," says Jacob Levy.
"Not only could we examine the power of hatred, we could provide insights into people's opinions. The hatred index showed us that much of the antipathy toward the US was due to President George W. Bush, as well as the Iraq War. The index can help design programs for changing public perceptions."
The UN has already notified Trendum that it is ready to hire its services. Unlike other start-ups, founded and financed by venture capital funds on the basis of prospectuses promising future products and customers, Trendum already has a product and a few customers, including large, well-established companies satisfied with its services. Trendum has sold its technology and services to Time Warner, Estee Lauder, CNN and HBO. The company has broken even and will post $500,000 in revenue over the coming year.
Ori Levy says, "We decided to found Trendum after Gallup Israel was sold to the Gallup Organization. Since I managed Gallup Israel's high-tech, we knew how we wanted to do it. We knew we didn’t want financing for the testing and preparation stage. In addition, the high-tech bubble had burst and it was difficult at that time to raise capital for a new idea. We preferred to develop a product and bring it to market before seeking financing. And that's what we did."
Published by Globes [online] - www.globes.co.il - on August 4, 2004