From an MIT Classroom to a Multimillion Dollar Acquisition
During MIT’s Independent Activities Period in January 2010, a team of students and researchers from CSAIL and the Sloan School of Management came together with the idea of creating a new type of online restaurant recommendation service based off of semantic web technologies. Just three years later, in August 2013, the domain-hosting service GoDaddy announced that it was acquiring the group’s resulting company, a business called Locu that provides an online platform for promoting local businesses. The acquisition capped a hyper-speed journey for the company’s founders, from nurturing a fledgling idea to operating a hot commodity enterprise.
Locu has its origins in the Linked Data Ventures course taught by researchers from CSAIL and Sloan, including Professor Tim Berners-Lee and CSAIL Principal Research Scientist Lalana Kagal. The course, which is aimed at teaching students new web technologies to be used in developing a viable business pitch and working prototype, gave CSAIL graduate student Marek Olszewski and postdoctoral fellow Stelios Sidiroglou-Douskos an opportunity to team up with Sloan students Rene Reinsberg and Marc Piette. The group went on to win the class competition, which inspired them to think about dedicating the time and resources necessary to turn their idea into a full-fledged technology company.
“Through the Linked Data Ventures course, Marek and I started working with Marc and Rene, and the team ended up being a really good mix of people,” said Sidiroglou-Douskos. “We ended up winning the class competition, and we took that as a sign that maybe we should push our concept a bit further. We dedicated the next few months to building a prototype of our original business idea.”
While the team’s original business concept changed considerably as they worked towards launching a company, they quickly realized how well they worked together, a vital ingredient for success according to Olszewski.
“What we built in the Linked Data Ventures course wasn’t very interesting, but we were able to create a great team early on. When starting a new business, the team of people you put together ends up being very important,” said Olszewski. “I think it’s extremely important to get the right team early on. Many things happen over the course of starting a company that will test your relationships and your ability to work together, so having the right group of people is the number one factor.”
Based off the team’s success in Linked Data Ventures, and thanks to the support and encouragement of the MIT community, the group decided to give entrepreneurship a shot. Olszewski credits his advisor Professor Saman Amarasinghe, a principal investigator at CSAIL, with being incredibly supportive and allowing him the opportunity to pursue his dream. Similarly, Sidiroglou-Douskos explains that the atmosphere at CSAIL, where many of his colleagues were in the process of or had previously tried their hand at starting their own businesses, was inspiring for him.
While meeting with potential investors and partners during Locu’s original round of funding, the founders soon realized that what most excited people about their concept was not the idea to develop a better restaurant review service, but the technology they had developed to collect and organize restaurant data. The team came to the decision that a better avenue for their efforts would be in providing a platform for businesses to maintain and update important information like restaurant menus, hours of operation, pricing for services and more.
Thanks to Olszewski and Sidiroglou-Douskos’ background in computer science, the team was able to develop a state-of-the-art platform to allow businesses to provide vital information across multiple platforms like Yelp and OpenTable.
“Coming from MIT, we took a tech-heavy approach to solving this problem of how to maintain business information online,” said Olszewski. “We amassed a large data set of structured information on local businesses using in-house machine-learning algorithms that analyzed all of the raw information that we were able to collect about a business, from online content to in-store photographs and more. As even today’s best machine learning algorithms are not perfect, we also built out tools to manage a large workforce of crowd workers that could then vet the decisions made by our machine learning algorithms to ensure that all of our information was accurate.”
Once the technological aspect of the Locu platform was developed, the team set about forming partnerships with influential sites like Yelp, OpenTable, Foursquare and TripAdvisor so that Locu could consistently distribute business updates to each site. After partnering with GoDaddy in the spring of 2013 to ease the process of creating a website for small businesses, the decision to merge with the company was easy, according to Olszewski, due to GoDaddy’s focus on small businesses and customer service.
In the wake of Locu’s acquisition, both Olszewski and Sidiroglou-Douskos encourage other CSAIL students interested in starting their own businesses to take the leap.
“I think this is excellent time to start your own business because it’s such an exciting time in computer science, there are so many problems where technology can now provide solutions, and there is funding available,” said Sidiroglou-Douskos. “Even if your startup does not succeed, you will get exposure to various aspects of business and the technology industry, which can help you focus in on what you want to work on long term.”
Olszewski encourages those interested in entrepreneurship to take the time to put together a strong team early on and to draw on the many resources available at MIT.
“Take advantage of the resources at MIT. The Martin Trust Center was an invaluable resource and without some of the entrepreneurship classes we took it’s hard to see a way that we could have formed our team that early on and proven to ourselves that we could work together,” said Olszewski.
-Story by Abby Abazorius, CSAIL