The Unica Story: Yuchun Lee’s Journey from MIT Blackjack Team to IBM Acquisition
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more generally applied what its founders knew about data mining and statistics to problems such as financial modeling. A few years into it, however, Lee and his team realized they needed to focus on a particular segment in analytics, which was too broad a field for a startup to tackle. Some brainstorming and market analysis led them to focus on software applied to marketing.
“Marketing was not automated then,” Lee says of the mid-1990s. “We thought it was pretty interesting, and a big-budget item for companies.” Also, at that time there weren’t many competitors trying to make marketing more efficient with software. “After 15 years,” he says, “I know why—it’s really, really hard.” That’s because the tasks and processes involved in marketing are very diverse, they involve a huge amount of data and analysis, and also, marketers are inherently creative types. “They hate to be automated,” Lee says.
By the late ‘90s, Unica was focused on marketing and customer relationship management—helping companies better understand and reach their customers by organizing their sales and marketing processes. During this time, Lee was also moonlighting with the MIT blackjack team. He’d leave for Las Vegas on Friday night, work with the team, and take the redeye back on Monday morning—sometimes with large amounts of cash strapped to him. He didn’t say whether he used any of his winnings to help keep Unica going in the early days—but it’s worth noting the company didn’t take any venture money until 1999 ($12 million from Summit Accelerator Fund and JMI Equity Fund).
Yet the company never spent its investors’ money. Unica’s revenues were growing at a steady clip, and the company was doubling in size about every three years, Lee says. (The company had about $4 million in revenue in 1999, according to this profile.) He attributes its growth to having a “fairly grounded, intellectually honest culture” at the company. “We try to be self-reflecting and brutally honest,” he says. “That helped us read the market correctly early on” as the company evolved its online marketing business, with the rise of the Web in the late ‘90s. It also developed a successful software-as-a-service model.
So what made Unica unique? Lee is much less blustery about his company’s strengths than a lot of public-company CEOs—which makes him sound more credible. “I don’t mean that Unica is the best company and is always 100 percent right,” he says. “We’re not perfect—we made mistakes, … Next Page »