The Next Level
to Vivisimo’s expertise because mining millions of terabytes is a growth market.
In 2000, Valdes-Perez, who was a com- puter science faculty member for 10 years, and two fellow CMU researchers, Jerome Pesenti and Christopher Palmer, saw the new search field’s potential. At CMU, the trio had developed more efficient ways to cluster large numbers of search results into topics computed immediately from search results. Conse- quently, users gained more value from their searches.
The three men decided to found a company to have greater influence, and drew inspiration from other successful CMU spinoffs. They initially invested $70,000 of their and their families’ money. Then, they received Small Business Innovation Research grants from the National Science Foundation and convertible loans from the state of Pennsylvania, which added up to about $1.5 million.
Early on, Valdes-Perez says, Vivisimo’s intention was to invent and sell search software that was complementary to what customers had rather than a full product. “I was positively surprised when our technical team, including the co-founders, developed the full product. Then we could sell complete solutions rather than pieces, which really broad- ens the market possibilities,” he says.
In a 2011 report, McKinsey & Co. showed how big those possibilities are. McKinsey projected that search “services enabled by personal-location data can allow consumers to capture $600 bil- lion in economic surplus,” and the U.S. healthcare sector value could grow $300 billion annually while healthcare expen- diture may drop 8 percent. International Data Corporation projects that the big data market “will grow from $3.2 billion in 2010 to $16.9 billion in 2015.”
Prior to its acquisition by IBM, multiple
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ABOUT VIVISIMO
Vivisimo, a spinoff of Carnegie-Mellon University, started with $500,000 in seed capital and a $1 million grant from the National Science Foundation. It previously raised $4 million from North Atlantic Capital and $1.6 million from North Atlantic Capital.
corporate suitors approached Vivisimo, Valdes-Perez says. “But, either we weren’t interested or the timing wasn’t right. We provided the technology to make a strategy credible,” he says. “It’s a dream when a big company—the fourth largest in the U.S. by market cap in IBM’s case—wants to roll you out everywhere. If making an impact is part of your goal (and whose isn’t?), then it’s a great outcome.”
The son of Cuban immigrants considers several things to be his proudest profes- sional achievements. These include founding Vivisimo, serving as its chief executive officer for nine years, growing it without venture capital, and helping guide it to the top-ranked position in enterprise search software.
As a boy growing up in the Chicago area, he gravitated toward science and technology naturally since his father was an electrical engineer and his mother a math teacher. Before entering college, he says, “I toyed with studying law and economics, but found that computer engineering— and later, computer sci- ence—was what I was best at.”
He earned his Bachelor and Master of Science degrees in information engi- neering from the University of Illinois at Chicago and took graduate courses in artificial intelligence at the Massachu- setts Institute of Technology. Valdes-Per- ez says he entered the field of computer science because, “I liked the idea of making things, but was lousy at making physical things. So, make software!”
This led to his earning a Ph.D. Degree in computer science from Carnegie Mellon
University and becoming a researcher. He says, “I really liked artificial intelli- gence, since, to me, it was less dry than other computer science fields. It involves the complex, subtle subject of intelli- gence, as embodied in software.”
Tech skills run in the family, as Valdes- Perez’s brother studied electrical engi- neering at MIT and his sister received a chemical engineering degree from the University of Illinois at Chicago.
When it was acquired, Vivisimo’s customers included Proctor & Gamble, the U.S. Air Force, Lexis-Nexis, the Social Security Administration and the U.S. Navy. Oracle and HP, competitors for IBM’s leadership in big data search have also purchased companies in the sector.
Valdes-Perez has advice for would-be tech entrepreneurs. In his experience, it helps to have the humility to seek busi- ness knowledge from various sources: books, advisors and peers. “Many aca- demics, who often have been the smart- est guys in the room throughout their lives, think they have all the answers,” he says. “Entrepreneurial challenges cannot be overcome by sheer force of intellect. They are more subtle than that. Learn to ask good questions, listen to the answers and adjust your beliefs (or not!) based on what you learn.”
When asked why he didn’t stay on at Vivisimo like his two colleagues, Valdes- Perez says: “It was time for me to take pride in what has been built, cheer it on to new heights and find new impactful things to do. Making something out of nothing is what I enjoy the most.”
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