Sramana Mitra: You were doing lead generation for online stores, but the revenue models changed.
Trevor Traina: Correct. Instead of expecting the brands to pay us for consumer choice data, we let the retailers pay us for qualified leads.
Sramana Mitra: That has become the standard business model for that part of the ecosystem—comparison shopping.
Trevor Traina: Very much so, but at that time, it was not the standard model. We ended up taking up $5 million in VC money.
Sramana Mitra: Who was the investor?
Trevor Traina: The lead investor was called Media Technology Ventures. We took money from GE Capital and Intel.
Sramana Mitra: This brings us to what year?
Trevor Traina: The beginning of 1998.
Sramana Mitra: You have now $5 million and Compare.net has changed its revenue model. How did that go from there on?
Trevor Traina: It went much better. In 1998, we did about $1 million in revenue. We were about a 50-person team. In 1999, we were expecting to do $5 million in revenue. I was personally getting increasingly concerned by the craziness of what became the first Internet bubble. The valuation to me seemed insane. It did not seem sustainable. I was able to convince one of our key partners, which was Microsoft, to buy the company. In March of 1999, I sold the company for approximately $100 million.
Sramana Mitra: The only financing you had in the company was that $5 million?
Trevor Train: Plus about $300,000 from friends and family.
Sramana Mitra: Awesome. So you got a great exit.
Trevor Train: It was 12 months after the Series A round. If we had waited another month, we would have had to do another round of funding.
Sramana Mitra: Did you have to go to work for Microsoft?
Trevor Traina: Yes, for two years. I moved the entire company to Washington.
Sramana Mitra: Then what happened?
Trevor Traina: We integrated into Microsoft and we built the first shopping channel, which at that time was called MSN e-Shop.
Sramana Mitra: What happened after you were done with your lock-up at Microsoft?
Trevor Traina: I had an opportunity to stay and work with Steve Ballmer who I liked very much, but I realized that big companies are just not in my DNA. I would have hated staying. I returned to California and in the interim, a person who on my team at Microsoft approached me with an idea for a new company around managing corporate metadata, which reminded me of the normalization issues we had faced at Compare.net in building our product databases. I co-founded that company. It became SchemaLogic. I was the Chairman. Then I moved back to San Francisco. While helping SchemaLogic, I teamed up with my co-founder from Compare.net and we found a young entrepreneur who had a small idea called StepUp. We partnered with him and built the company called StepUp, which is a real innovator in local commerce.
It was an interesting point because what we had seen at Compare.net is people liked our informational tools but we didn’t always convert them into an online buyer because at that time, there was still a lot of people who didn’t trust the Internet for commerce. StepUp allowed us to offer informational tools to then allow people to finish their purchase at a local retailer. It was a great idea. In 2006, I negotiated the sale of StepUp into Intuit, which bought it and integrated it into the QuickBooks point of sale system.