After months of relative silence, Ignition Corp. has begun making noise again, providing its mentoring and funding proficiencies to two more companies.
The most recent is Avogadro, launched this week with the vision of combining business-to-business, mobility and Internet technologies into a new communications service. The company is led by Tom Reardon, a former Microsoft Corp. executive involved in forming Microsoft’s Explorer and MSN products. Last week, Ignition helped launch UIEvolution, a firm initially focused on developing a platform architecture and games for mobile phones.
When several former McCaw Cellular and Microsoft Corp. executives formed the company last March, Ignition received a plethora of press. Its high-profile founders were touted as potential catalysts for jump-starting the wireless Internet scene in the United States.
However, Ignition has been working with only six firms since its launch, and until this month it had identified only one-Etrieve Inc. Company executives say the relatively low profile to date stems from its extreme choosiness, combined with a philosophy of forming deep and lasting partnerships with companies.
Ignition offers the connections of its senior management team, Internet and wireless industry veterans who see wireless Internet as a huge opportunity to which they can bring their joint experience and industry connections.
“We thought it was an enabling technology that would bring about a tidal wave of change a la the PC and Internet,” commented Jonathan Roberts, former Microsoft executive and managing director of Ignition. “Wireless Interent brings in a new era of very personal computing, lifestyle computing. The device becomes a part of who you are.”
But there is a virtual army of firms rushing to battle in this new space, carrying weapons of many different sorts. Ignition said the few that make the cut must meet certain criteria.
1) Have a vision. An Ignition company must know exactly where it plans to go, and that direction must be compelling.
2) Have solid footing. Where is the company today? Can the company deliver its idea to market within 18 months? Is the idea dependent on some other developing technology not yet available?
3) Have a bridge connecting the vision and the business model. This requires partnerships.
4) Style. The management culture of a company must be consistent with Ignition’s personality. “They’ve got to like us and we’ve got to like them,” Roberts said.
Ignition is not interested in companies that are not standards-based or those that seek to solve only a particular problem, but are not part of an overall solution. Firms offering transcoding of Web content for wireless devices are an example.
“If that’s all you’re doing, you’re not delivering a greater value-add,” Roberts said. “It’s very interesting and helpful, but it’s not a full company or solution.”
Ignition places interested companies through much more scrutiny than most venture-capital firms, primarily because it seeks to be more than just a VC firm, although it has a venture funding arm that has provided money to companies such as Everypath Inc. and mDiversity.
“We’re really a partnership company,” Roberts said. “We get involved with our partners even more deeply than we originally anticipated and act as an extension of their management team.”
Most venture capitalists accept equity in a company in return for funding, which they subsequently sell off to make a return. Not Ignition, Roberts said. Instead of moving on once a company finds its legs, Ignition said it will invest more.
“Our value grows as the company grows,” Roberts said.
More than cash, Ignition intends to leverage its experience in the early Internet industry to help wireless Internet firms deal with the challenges of this nascent market. They include customer ownership issues, a lagging developer environment and the ever-confusing value-chain and business models inherent in the wireless Internet space.
“We’ve been through this type of rapid change before,” Roberts said, referring to the Internet’s convergence with the PC industry. Ignition has opinions on what will work and what won’t, and intends to back this up with investments in firms that meet its philosophy.
“Ignition takes a very holistic partnership approach,” said Sarah Van Dyck, vice president of marketing for etrieve. “They roll up their sleeves and get involved in a company across the board.”
That Avogadro is led by a former Microsoft executive is no accident. In addition, Ignition co-founder Satoshi Nakejima, also a Microsoft ex-patriot, heads the new UIEvolution. Given this heavy emphasis on people and relationships, it is no wonder Ignition is promoting itself on the basis of personality.
“We’re going to increase your chances of success and you’re probably going to have more fun,” summed up Roberts.
