By SUSAN LAHEY
Reporter with Silicon Hills News
“It was terrifying and exciting at the same time,” said CEO Paul Murphy. “We thought, ‘We are sitting in front of something huge.’ We’d been afraid to address how big it is.”
So when they wrapped up three intense months as part of the first class of Techstars London, the cofounders sat down and asked themselves: Are we going to America? Unanimously, the answer was yes. And that’s how OP3Nvoice, which TechCrunch dubbed its favorite among the graduates, wound up in Austin, Texas.
Moving to Austin
With OP3Nvoice’s platform, developers can add audio and video search to any application. Recordings that have been saved and stored—phone calls of all stripes, lectures, movies, depositions—historically collected dust because it was too hard to mine them for specific information. Hours of recording required hours of listening for a single passage or bit of data. OP3Nvoice lets users search them by keyword, to quickly find the relevant passage
When the founders arrived at Techstars—one of 10 participants chosen from more than 1,300 applicants in 72 countries—they’d planned to focus on providing these search capabilities to the financial services industry. Traditionally, in the U.K., investment is revenue based, according to Murphy. Startups have to show that they are self sustaining to lure venture capital money. So the OP3Nvoice team was going to start with financial services and then look at other verticals. But what often happens is that while U.K. companies are slowly bootstrapping their way to success, some U.S. counterpart walks into a VC’s office with nothing but a team and an idea and walks out with millions, taking its company to market fast and blowing the U.K. company out of the water.
The founders, and their mentors, didn’t want that to happen. So they started looking at moving their business to a U.S. city with a Techstars presence.
“Austin is reasonably priced, where the overhead of running a business does not put you out of business in the first two years,” Murphy said. “I remember one guy at Techstars saying ‘Move where you want to live because if you don’t want to live there, you won’t build anything good.’”
Murphy, who is American though he’s spent much of his life in Europe, was the only one to check out Austin before the team took the plunge. He’d ridden in silence on the plane next to a stranger. When they landed, the stranger asked “Coming to visit or coming home?” Murphy responded “Coming to check out my new home.” The stranger –a writer for the New Yorker who lives in Austin–handed him a business card and said “Let me know if there’s anything I can do for you.”
Murphy discovered audio technology as an office manager for a graduate computer center for the visually impaired. The center was trying to develop tactile maps and Murphy taught himself the programming skills to do it. After a while, he went from being the mentee to the mentor among the programmers. One day his boss told him he was under-utilizing his skills. She had a brother who worked at a consulting firm in Boston that normally only hired graduates from MIT and Harvard. Murphy talked himself into a job there and spent two years building his skills.
He progressed to director of Technology at WSC where he developed back office tax processing solutions used by every large bank in the US. But it was a few jobs later, as CTO at Adeptra in London, that he became enthralled with the intersection of telephony and computing. Adeptra was working on a new field: Automated calls to customers in the case of events like potential fraud. They were dealing with complex problems: Speech recognition, speech-to-text and text-to-speech technology.
“It was really a lot of fun,” Murphy said. “It was so much on the cutting edge.”
In 2010 Murphy and his co-founders started Calltrunk, which let consumers and small businesses record their phone calls in the cloud. In disputes over financial and other transactions, the businesses had records of what was said; consumers didn’t. But Calltrunk realized that while its customers were recording calls, they weren’t using any of the data. Turned out they found it too cumbersome to find the information they wanted in the hours of recording. So Calltrunk built an API that would make the phone calls searchable. When they joined FinTech Innovation lab in London, that’s the part banks found really interesting.
That was the birth of OP3Nvoice.
They were swamped by various industries: Education technology, human resources, insurance, among them. Joel Gendelman, CEO of n2uitive which provides software that works like a CRM system for recorded statements in the insurance industry.
“There are a bunch of tools out there for speech-to-text but with multiparty conversations, sometimes you have an interpreter, sometimes the person is calling from the side of the road…I haven’t really seen anything that works before,” Gendelman said. OP3Nvoice helps insurance companies find keywords that might include information that tips them off to fraud or clarifies who was at fault. With $400 billion in annual insurance claims, the margin of accuracy it provides means huge savings for insurers.
“Besides their technology, they’re the best partner I’ve ever had,” Gendelman said. “They get it done. They’re totally transparent and awesome to work with.”
Gendelman, a self-identified “geek for speech recognition” is working with some of the technologies still in development for OP3Nvoice.
“I am very excited about what they’re building,” said Jason Seats, managing director of Techstars Austin. “I get excited when I hear people talk the way Paul does: ‘Five years from now it would seem weird to you that you don’t have every conversation on your phone recorded and available to search.’ There are lots of niche vertical use cases. We have wave on wave of recorded data. Making it more searchable is clearly the right way to go.”
“My brother had a software company. He was looking at starting up an office in London and said ‘Why don’t you work for me?’ I love that it’s so creative. You can do anything you can think of and you can make it happen. Any problem you have you can solve. I love sitting in a room with engineers saying ‘How are we going to do it?’”
Clarke met Murphy while working as a project manager for Right Party Connect, a company that produced notification systems for financial institutions which Adeptra purchased in 2007.
Newton, a Londoner born and bred, is a former financial journalist turned entrepreneur. He co-founded Screendragon in 2001 which provides marketing software.
“Big companies spend zillions to have wonderful offices, good food…but most of your time is invested in looking at a big screen a foot and a half from your face. If that sucks, you’ve got everything right except that the bit that matters,” Newton said. I couldn’t believe how bad the UX was for business software.” He decided to start with marketing software because marketing departments “have quite a bit of money to spend and they like whizzy things.”
His customers wound up being giant enterprise companies in the U.S.
Ivo Rothschild, the fourth founder, is in charge of R&D, which is still in Montreal. He and Murphy met while working at a subsidiary of Solomon Brothers. Rothschild will split his time between Austin and Montreal.
At Home in the Weird City
Since landing in Austin in mid-November, the team has met with investors, gotten office space in a warehouse on the East side and started working out of Capital Factory part time. Murphy has already begun falling in love with Austin. Clarke, who is Australian, has lived in Switzerland, Vancouver, New York and London, has never been bothered by moving.
“You get there and figure it out,” she said. “It’s one foot in front of the other. Eventually you can look around and say ‘This is actually quite good.’”
With Austin’s burgeoning relationship with Tech City in London, local leaders hope this will be one of many companies that venture over the water in both directions.
Serial entrepreneur Fred Schmidt, who has led the initiative to connect Austin with Hackney in London as well as Tech City, said that Austin’s affordability and lifestyle will make Austin more of a destination for European countries as the relationship develops. “A line is starting to form of companies of interest” going both directions, he said. “In March we’re probably going to bring 40 or 50 companies to Austin and we’re evaluating a huge contingent of people from Austin back to London for the same reason…you immediately can be successful in two massive markets.”
In places like Silicon Valley, he said “they all live for one dream…and that’s just to exit. We have a whole different value proposition that includes a more balanced outlook on life, family and lifestyle.”
While both Schmidt and Murphy acknowledge that the British investment system is beginning to loosen up, the U.S. culture of fail forward and the relative lack of complexity in the investment system invites, as Seats puts it, “a richer ecosystem.”
“Austin still has some ground to cover in that area,” Seats said. “We’ve built a story line of being a bootstrap-friendly environment. When you have a culture that’s a rubber-meets-road environment people make financial investments, not vision investments.” At the same time, he said, “Everybody’s wishing that Austin companies were swinging bigger.”
“Austin investors do like tangible hard tech,” Seats added. “If the thing you’re trying to bring to market looks hard to build, that’s good…. OP3Nvoice fits that mold to some extent. The indexing of media is a technologically challenging problem and that makes them feel a little more special (as an investment).”
Right now, OP3Nvoice is embarking on an interesting leg of its entrepreneurial journey. Last year, the team took on Techstars, found its direction and Newton co-authored a best-selling book called Stop Talking, Start Doing—the kind of book that gets a person with an entrepreneurial spirit to quit his day job, or move to the City Weird.
“You have to just grasp those opportunities when they come along,” Newton said. “If you don’t take them, you have a pretty good idea where you’ll be tomorrow…. You just have to say ‘Yep, I’ve got a bag full of trepidation about this, but let’s grab it and see where it leads’.”