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Wednesday, October 8, 2008

My Idea Became a Billion Dollar ($945 million) Company

Back in 1999, three Nortel employees, namely myself, Claude Bouffard, and John Shannon were enjoying beers after work at the Royal Oak pub in Kanata, Ontario. We bantered about some ideas around micropayments on the internet. Why couldn't we pay small amounts of money, such as 25 cents for the newspaper, and have it just show up on our phone bill? We worked in the DMS division of Nortel and had some idea of how the billing system worked. After all, telcos have very well established billing systems for handling tiny line items, and they have an established system for reconciling these amounts amongst themselves. So the idea was essentially that you'd click on a link, a secure transaction box would pop up and prompt you for your "Go Pin". Well, the name Go Pin would come later but it serves to help you understand how it would work. The 25 cents or whatever it was would simply show up on your phone bill.

Our VP at the time, Bob Tipple, was convinced enough by John and Claude to allow Claude to run full-time with the idea. Claude being the infectious ball of energy that he is, drove the idea forward to the point where it had enough legs for the internal incubator folks to take the whole idea seriously. John and Claude sold it to the incubator folks, I was occasionally cheerleading from the technology side. Nortel created the business as GoPin Inc, and venture capitalists were found, and finally a CEO, Gary Marino, from the banking industry in the US came on board to lead. The company underwent a number of name changes, to Pinmoney then I4Commerce, then BillMeLater and it moved to Baltimore. Also, as you likely already figured out by now, the original idea morphed into BML doing realtime credit checks and handling the billing, as opposed to trying to herd the cats we like to call telcos.

Ironically the company sold for $945 million, more than Nortel's total market capitalization today. What did I get? Well, I do have a nice mug, a great story, a sense of pride, and I'm a little older and a bit wiser now. Maybe it's time to try another idea, but this time actually get some money out of it. I do not know how Nortel itself fared, they likely cashed out to a VC early.

Update: This has been picked up by the mainstream media, I have made the front page of the Ottawa Citizen today (Oct. 9). Why does everyone have to misspell my last name?


John Clarke said...

I had a good laugh when I saw they misspelled both your name and Nortel (in the headline it said "Nortell"). Classic Citizen stuff.

I had visions of you floating on a private yacht in the Caribbean, but your blog post reminded me (I think we discussed it back in 2001 or so) that you only walked away with the mug :*

Hope things are going well for you. The news story was a great occasion to tell lots of BRISC stories to my coworkers. Was it Darko that you snuck up behind and said "Darko, its me. God." through the plotter tube, resulting in a lengthy chase scene over in Lab 3?

I actually have that BRISC team photo in my office here, so I was showing everyone who Jim Summerville was...

Jim Somerville said...

Hi John,

It was Arnold that I spoke to through the plotter paper cardboard tube. It was quiet, and I snuck up behind him, close enough to get it really close to his ear and I simply said his name through the tube. He freaked and chased me for quite a while through the halls. Classic workplace hijinks.

Another good one was one evening we were working late (a common theme in the BRISC project), and there were some inflated balloons kicking around from some celebration earlier in the day. Again, it was very quiet. I floated a balloon over Larry's head while he sat unaware at his computer. Then I popped it with a pin. The boy just wasn't the same after that. ;)

Eric Dewhirst said...

WOW! That is one cool startup story. Why did you not stay on? did you have any equity in the company?

That mug is classic - way to go to be part of something as huge as BML. I am sure you have another great idea floating around in the back of your mind or in some of your notes somewhere.

Cheers - Eric

Jim Somerville said...

Thanks for your comments Eric. There were two main reasons that I left the group. I could tell that the existing business plan wouldn't work....I crunched the numbers for myself. Also there was an opportunity in another group in Nortel (software architect role) that would allow me to further my Linux work on carrier grade platforms. So to me at the time it was a no-brainer. I wish Nortel had given me some token number of shares in GoPin just to say thanks, but they didn't. Yes, I do have other ideas....