The Idea to Go Global for DataClear

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GO GLOBAL—OR NO?

For two years, DataClear has had the data analysis market to itself. But now a British upstart is nipping at its heels. Should DataClear continue to focus on its strong domestic prospects or expand overseas to head off the nascent international threat? "WHY AREN'T THEY BITING? " wondered Greg McNally as he laid down another perfectly executed cast. He was fly-fishing in the most beautiful spot he had ever seen, on the Alta in Norway-reputedly the home of Scandinavia's worthiest salmon. And he had plenty of opportunity to admire the view. No fish were getting in the way. What a difference from the luck he'd had a couple of weeks earlier trout fishing at Nelson's Spring Creek in Montana. It seemed like so much more time had passed since the two-day off-site he had called there, designed to be part celebration of the past, part planning for the future. Some celebration had definitely been in order. The company, DataClear, was really taking off, fueled by the success of its first software product, ClearCloud. In 1999, its first full year of operation, DataClear's sales reached $2.2 million. Now, the following September, it was looking like 2000 sales could easily reach $5.3 million. At the all-staff meeting on the Friday before the off-site, Greg had announced the company's success in recruiting two more great executives, bringing the staff to 38. "I'm more confident than ever that we'll hit our goals: $20 million in 2001 and then $60 million in 2002!" Clouds on the Horizon

A New Jersey native, Greg held an MSc from Rutgers and then went West to get his PhD in computer science from UC Berkeley. He spent the next 15 years at Borland and Oracle, first as a software developer and then as a senior product manager. He started DataClear in Palo Alto, California, in the spring of 1998. At that time, Greg realized that companies were collecting information faster than they could analyze it and that data analysis was an underexploited segment of the software business. It was at a seminar at Northwestern University that he saw his opportunity. Two researchers had developed a set of algorithms that enabled analysts to sift through large amounts of raw data in powerful ways without programmers' help. Greg cashed in his Oracle options and, in partnership with the two researchers, created DataClear to develop applications based on the algorithms. His partners took responsibility for product development and an initial stake of 20% each; Greg provided $500,000 in financing in return for 60% of the shares and the job of CEO. A year later, Greg offered David Lester, founder of DL Ventures and a former Oracle executive, 30% of the company in return for $5 million in additional funding. In his previous positions, Greg had shown a knack for leading "fizzy" technical teams, and under his leadership, the two researchers came up with a state-of-the-art data analysis package they dubbed ClearCloud (from the clarity the software brought to large data clouds). Two versions, one for the telecommunications industry and the other for financial services providers, were officially launched in September 1998. ClearCloud had a number of immediate and profitable applications. For instance, it could be used to help credit card companies detect fraud patterns more quickly in the millions of transactions that occurred every day. Greg conservatively estimated the annual demand from the U.S. telecommunications and financial services sectors to be around $600 million. The challenge was to make potential users aware of the product. ClearCloud was an instant hit, and within just a month of its launch, Greg had needed to recruit a dozen sales and service staffers. One of the first was Susan Moskowski, a former sales rep at Banking Data Systems, who had worked successfully with Greg on several major joint pitches to financial institutions. She had spent two years at BDS's Singapore subsidiary, where she had laid the groundwork for a number of...
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