So, let’s get this straight. Brett and Scott are brothers. Scott and Paul are best friends. And Brett and Jack are best friends.
Sounds like the makings of a new TV sitcom, but it’s not. This is the true-life story of how ambition, passion and smarts have taken Quantified Systems, Inc. from one successful business to another.
Scott Crosby, Brett Crosby, Paul Muret and Jack Ancone are data diggers of sorts, generating comprehensive Web site traffic information and reports. The main character, though, is an interactive, playful, blue fella they fondly call Urchin.
Urchin, which originated from a cocktail napkin doodle drawn by Scott Crosby, doubles as Quantified’s premier software product.
The Urchin software compiles Web site traffic information and generates reports on things like site usage, hits, page views and search engine keywords.
To avoid any online privacy issues, Urchin only profiles Web site usage, not Web site users.
Quantified’s mantra is “Power to the People” , that is, bringing top level technology to the masses.
The latest version of the Urchin software, released this month, can process one gigabyte of Web site log files in about 10 minutes. Other similar technology takes about 18 hours, says Brett Crosby, senior partner and vice president of business development for Quantified.
The new Urchin product is also Palm enabled, allowing users to check their Web site stats from their hand-held, wireless device.
Major Customers
Quantified, housed in a building on India Street in Little Italy originally built in the 1920s as a furniture warehouse, has already collected a group of big customers since Urchin’s first commercial introduction back in 1998.
Customers include Honda Motor Co., MindSpring, EarthLink, HomePage.com, FreeBSD, Nettaxi.com and ARCO. The Urchin software, which starts at $199, is also used by such government agencies as the U.S. Defense Department and nonprofit organizations like the National Institute for Cancer.
“The reason we’re enjoying success is we’re targeting very large hosts who have complex architecture,” said Ancone, senior partner and vice president of product management for Quantified. “The market is saying, ‘You’re my host. Provide me information.’ (Web) hosts are charged with this task of daily reporting to their users.”
Atlanta-based EarthLink, which hosts 100,000 to 200,000 Web sites, has been evaluating the Urchin technology for quite some time.
“Web sites all log events that occur on them called site logs. Turning those events into meaningful stats takes some rather large server processing,” said Bob Georgius, senior product manager for EarthLink in Pasadena. “It took longer to create the stats with the tools we had. With the Urchin technology that same job is accomplished in a couple of hours.”
E-Commerce
Quantified recently struck an agreement with San Diego-based Miva Corp. to allow E-merchants to track online shopping patterns, including every dollar spent on a site. Under the partnership, Miva customers can license the Quantified’s new e-Urchin software and visa versa. The e-Urchin software is different from the regular Urchin software.
“This data becomes important for a merchant who puts forth the effort and expense to establish an online presence to look at how successful their products are and what products are selling,” said Sherry Isler, marketing and communications manager for Miva, which develops browser-based software for E-commerce sites.
Not only has Quantified joined the E-commerce craze, but it has completely turned its business focus around since its founding in 1995.
Back in 1993, Paul Muret, Quantified’s CEO, called on his buddy Scott Crosby, an English major who had recently graduated from UC Santa Barbara, to come to San Diego to work on classic cars.
The lifelong friends, who always enjoyed tinkering with things, used to buy classic cars in Canada and sell them in the United States. Crosby fed his entrepreneurial appetite during college by owning a couple of small businesses, including an arcade/pool hall.
Classic Cars
The friends’ classic car business didn’t last long. Muret had begun developing a Web site as a teaching tool for UCSD physics students.
“He said, ‘Hey, there’s this thing called the World Wide Web.’ He said, ‘I think we need to start a business,'” Scott Crosby said.
So the two took the idea to Crosby’s uncle, who ran a biotech company in Solana Beach. The uncle liked the idea and invested $10,000 in the company, which was originally named Web Depot. Scott Crosby and Muret began designing and hosting Web sites from a small room at the uncle’s biotech company.
“There weren’t too many people doing it at the time,” Crosby said about Web development.
Soon, the firm was hosting several company Web sites, including Sharp Healthcare and Solar Turbines. Quantified still has an employee who manages Solar’s internal sites.
“We had a lot of success with Web hosting,” Scott Crosby said, adding the company was generating $400,000 in annual revenues from its Web development and hosting business.
In 1998, Quantified’s partners got a call from some friends who worked for a big PR firm in Los Angeles. The technology the PR firm was using for one of its clients’ Web sites, Honda, couldn’t handle the massive amounts of data required for the site.
That’s when a light bulb blinked on over Scott Crosby’s head.
“If Honda can’t find anything to handle its data then maybe other big companies can’t either,” he thought.
Refocused Company
Quantified changed its name, sold its Web development and hosting business, and began commercializing the Urchin technology, which was originally developed as an internal monitoring and reporting tool.
While the company has only been marketing the software for a couple years, lofty goals are already being set.
“Our plan is to beat WebTrends out of the market,” said Brett Crosby, who joined Quantified in 1997 after launching HollywoodWeb, which helps talent agencies get online.
The Portland, Ore.-based WebTrends Corp., which develops real-time visitor analysis and E-commerce revenue tracking, recently reported $10.4 million in revenues for the first quarter of 2000, compared to $3 million for the first quarter of 1999. As of early last week, WebTrend’s market cap was $746.1 million.
While Quantified is working on saturating the national market, Ancone said the plan is to eventually market Urchin across the globe. The software already includes a multilingual ability for languages such as Spanish, Italian, German, French, Japanese, Kanji, Mandarin and Korean.
“What we’re really doing is working with really large hosts that have a presence all over the world,” said Ancone, who joined Quantified last summer after working as an investment analyst for CommonWealth Partners, a private equity investment fund adviser in Los Angeles. “We’re trying to capitalize on our domestic channels that have a presence overseas to facilitate our international expansion.”
Market Penetration
To further spread the use of its Urchin technology, Quantified is also developing bundling agreements with Web server vendors. “It gives us more market penetration by default,” Ancone said.
Investors have begun to recognize Quantified and its Urchin technology. The firm recently scored $1 million in angel financing. The lead investor was Green Thumb Ventures of New York.
Unlike a lot of hot tech firms today, Quantified does not plan on going public anytime soon. The company’s 15 employees share in Quantified’s success through an employee stock option plan.
“In the beginning you can’t pay as much,” Brett Crosby said. “It’s a tremendous motivator for everyone because everyone has a piece of the pie. It has also allowed us to manage ourselves and each other to make sure everyone’s doing the right thing.”
Ancone noted everyone at Quantified is still underpaid.
“But we have our eye on the future. We’re trying to build a company that we can grow and be a part of. We’re not trying to get paid today,” he said.
“We’re all in our late 20s and early 30s and we’re working with some of the biggest companies on the ‘Net. That’s extremely motivating.”
Brett Crosby mirrors his friend/partner’s ardor.
“When we were kids we used to dream about doing business together. Now it’s a dream come true. For almost everyone here this is our life’s work.”
Quantified Systems, Inc.
President: Scott Crosby
Year established: 1995
Headquarters: 2165 India St.
Employees: 15. At least 15 more are expected to be hired by the end of 2000.
Revenues: Privately held
Business: Develops Web reporting and analysis tools
