Eric Tobias, the IT architect behind Carmel-based online battery supplier Technuity Inc., now is energizing another startup, Indianapolis-based iGoDigital, a fast-growing player in “recommendation” software for retailers.
Tobias, 31, was chief technology officer of Technuity, which distributes batteries, carrying cases and electronics accessories. He left the company, once known as Batteries.com, after it was acquired in November by Hauppauge, N.Y.-based Audiovox Corp. for $16.5 million, plus the repayment of $4 million in debt. The deal added $30 million to Audiovox’s revenue.
He founded iGoDigital in 1999, the same year he teamed with the Petruzzi brothers to found Batteries.com. However, Tobias, iGoDigital’s president, said the business didn’t get his full attention until he left Technuity. He described the 25-employee firm as “still a scrappy startup,” with annual revenue between $1 million and $10 million. Tobias, the nephew of former Eli Lilly and Co. CEO Randall Tobias, declined to be more specific.
iGoDigital is attempting to tap a hot technology niche-software that helps consumers make buying choices. Its system asks a series of increasingly specific questions about a user’s needs, then produces customized product recommendations from store shelves.
Say you’re shopping for a digital camera, but find the retailer’s dizzying selection overwhelming. A trip through iGoDigital’s online “recommendation center” asks whether it will be your first or a replacement, and whether the camera is for you or will be a gift.
It then moves on to other questions. Are you a casual photographer or a pro? Do you plan to focus on action shots, portraits or vacation snaps? Does the camera need to fit in your pocket? After breezing through the quiz, you’ll receive a list of digital cameras that meet your criteria, complete with product specs and prices.
iGoDigital counts Best Buy, Circuit City, Wal-Mart and the Home Depot among its 15 customers. They embed the system into their own Web sites for online shoppers. Some retailers also offer it via kiosks in stores, or on tablet PCs carried by salespeople.
“We believe the customer is going to continue to have way too many options, is going to need information to move through the sea of choices,” Tobias said. “If we can deliver the most relevant recommendation, we believe we’re going to win.”
In February, Tobias said, 5 million people used iGoDigital’s software to answer 15 million product questions. Retailers are attracted by an even more telling metric. Tobias said customers who use the system choose to buy recommended products more frequently-he said it gives retailers that offer it a 15-percent to 20-percent lift in revenue.
Tobias learned a lot about entrepreneurship at Technuity that will help him at iGoDigital, said Bob Shortle, senior managing director of Periculum Capital Co. LLC, the investment firm that helped raise the venture capital that launched Technuity.
“Entrepreneurs take what they learn from business one and apply it to business two,” Shortle said. “That’s the nice thing about these Internet ideas. People are very young when they start them.”
Stories like Tobias’ once were rare here. But TechPoint President Jim Jay said Indianapolis is beginning to enjoy the fruits of the high-tech cycle, in which innovators sell one fast-growing business and plow gains into other startups.
In an increasingly complex world, Jay said, businesses like iGoDigital that simplify decisions for customers have a good chance of success.
“We are in an information-driven economy. The more tools that can provide the consumer information in a low-cost manner, the better,” Jay said. “Their application it sounds like continues to deliver value-added information. If they can get the right information into the consumer’s hands, that’s a good place to be.”