Success? It's the name of his game
Tuesday 05 May 1998
Like most successful entrepreneurs, Keith Teare is an obsessive. "I have to be consumed by something to be interested in it," he says.
It is a quality that has come in handy in Teare's present job as CEO and co-founder of Centraal Corporation, a Silicon Valley start-up valued at $10m even before the launch of its product, a URL-shortcutting software called Real Name System that is widely touted as the next big hi-tech thing.
Teare isn't your typical Valley boy. For starters, he grew up on a council estate in Scarborough in the early Sixties, the only child of six to go to university (Kent, to study political science and sociology). Afterwards he set up the London-based Workers against Racism and rallied against British involvement in Northern Ireland. He published a book critical of the treatment of immigrants in Britain under a pseudonym, so that the National Front wouldn't get him.
Working for a small publishing company in 1981, he was put in charge of the computing system. He had never encountered a computer before. "I got completely obssessed," he says.
By 1986 he had translated his obsession into a database and software support company, which he set up with his brother Brian.
The Internet service provider Easynet came later, in 1994, shortly followed by the chairmanship of Cyberia, the Internet cafes.
Centraal grew from Teare's experiences with Easynet in France. While trying to give Easynet subscribers access to Minitel through the Web, Teare hit on the idea of simplifying the Uniform Resource Locator (URL) system to allow users to type in a simple keyword which would link them to the appropriate Web site without the need for complicated dots and slashes. He e-mailed his idea to Jean Marie Hullot, who at the time was the chief technical officer of Steve Jobs' NeXT Software. "Hullot e-mailed me back with one word, `Wow,' and I took that to mean that he wanted in," Teare recalls.
By the end of 1996, Teare and Hullot were ready to launch Centraal, using some $3m of private finance, much of which Teare raised from the sale of his stake in Easynet. In spite of the fact that Hullot insisted on remaining in Paris, Teare chose to locate his start-up in Silicon Valley.
"The Valley is still the centre of technology and it's difficult to forge relationships from outside the area. It makes a huge difference to be able to pop down the road and actually meet people," Teare explains.
As someone dedicated to the Net, he is aware of the irony of attaching such importance to face-to-face contact. But proximity to the action is not the only reason Teare chose to leave the UK.
"I knew we were going to need venture capital. In the US, only five in a hundred venture capital projects get finance, but in the UK it's more like one in a hundred."
His complaints about UK venture capitalists - that they are conservative and risk-averse - are familiar enough, but if he had to single out one obstacle to hi-tech start-ups in the UK it would be the financial sector's "lack of vision".
"Centraal got a valuation rate of $10m and we raised several million dollars of venture capital. That was without having customers or revenue coming in."
He contrasts this with the fate of Cyberia Online, in which he retains financial interest, which had trouble finding funding despite first-year revenues of pounds 500,000.
"In America, risk is part of the system. If it went away, the US economy would collapse because funds coming into the system would have nowhere to go."
Even when they do fund start-ups, British venture capitalists expect a bigger pound of flesh than their American cousins. "In the US, they only want 30 per cent - not 50 per cent - of the company, and there's a lot less interference," Teare says.
But it is Silicon Valley's business culture in general that Teare finds so amenable. "In England," he says (after a year in the US, Teare already refers to England when he means the UK), "people really are trying to do you in. In America, if people can see an advantage for themselves in your technology, they really don't try to steal it. There's much less dirty business."
From his roots in Seventies liberalism, Teare has already made the obligatory Silicon Valley conversion to libertarianism. "There's a really strong sense of openness and freedom here. In the UK, the feeling is that Americans are taught to seem open for marketing reasons, but actually, I think it's hard for Americans to be dishonest."
It is a partial and perhaps naive view, but Teare's enthusiasm is understandable. Right now he has good reason to be in love with Silicon Valley and America. He is, after all, sitting on the next big thing.
When I point out that the US remains highly bureaucratic, Teare counters that the endless tax and regulatory systems can indeed be irritating but "eventually you realise that's part of the openness".
Even litigation isn't the demon we think it is. "Actually it's a more open way of deciding things than quango-isation," observes Teare, and he has a point.
In its first year of operations, Centraal has tangled with its competitors over trademarks and patents, but in true Silicon Valley spirit, Centraal's lawyers, the Valley-based Wilson, Sonsini, Goodrich and Rosati, agreed to defer payment of their fees until such time as the company had banked some venture capital. "For a year they did all our legal work, from incorporation documents to share certificates."
Would it have been possible to have set up Centraal in the UK? "Definitely not."
Aside from what Teare calls (in pure Valley-speak) "a compelling technical story" and an injection of venture capital (in Centraal's case, both from the Silicon Valley venture company Draper Fisher and IdeaLab Capital Partners), the secret to a successful Silicon start-up is - to borrow a phrase - in the wrist action. "The keys are energy, aggression and openness," reckons Teare. "Out here there's no such thing as a successful small company. You start small but you're expected to get big quickly." Failure, if it comes, is swift.
Teare has only ever planned for success. Of the Real Name System, which allows Web users to reach sites simply by typing in company names, brand names, even marketing slogans in European or Asian character sets, he says: "Our idea is so necessary and so obvious that almost nothing can stop it."
Within 24 hours of the launch of Centraal's Real Name System at this year's Spring Internet World in Los Angeles, Teare's start-up had registered 500 Real Name addresses from companies keen to provide potential customers with the simplest possible navigational trail to their commercial Web sites. Since then, Centraal has picked up such blue-chip clients as Disney, Microsoft and Volkswagen, and it is looking to incorporate its Real Name System software into Web search engines, directory listings and, eventually, as an add-on to browsers. Centraal charges a flat annual fee for each "real name" registered and takes a royalty per hit on sites with heavy traffic. It is a compellingly simple idea, and with Centraal anticipating sales of $10m in 1998, rising to $120m in 2000, it is easy to see why Keith Teare is currently Valley's brightest-glowing golden boy.
Teare admits that his transition from social reformer to hi-tech entrepreneur seems a little peculiar, but traces it to "the strong feeling that social change comes from technical change". There is something oddly abstract about making your fortune selling names, and Teare admits to being fascinated by abstractions, not least of which is money. But while there is no doubting that money drives Teare's ambition - he is at the moment busy buying a sweet piece of California real estate - you get the feeling that money is not his primary preoccupation. Teare still has a political scientist's interest in putting abstractions into a social context.
"Something in my education does come through in the way I see technology. I do what I do not through being technical but through being aware of human beings," he says. And whatever Keith Teare does, he does to the max. "I still get a strong sense of uplift from creating things that change the way people behave."
In spite of his careful manner and measured tone, Keith Teare is not a modest man, though he likes to project himself as such. At one point during our conversation, I ask him if vision is necessary to a start-up (Teare doesn't think it is, although it helps), and he goes off on some riff about not liking it when people call him a visionary, without seeming to notice that I hadn't.
Still, you get none of the usual Silicon Valley snake oil with Keith Teare. The CEO of the Valley's next big thing is, after all, a Yorkshireman.
What he does have is the kind of rock-steady self-assurance and focus that has enabled him to turn his obsessions into a series of benign and successful business ventures. And if he is perhaps being a little disingenuous when he claims to feel "prouder about writing a book on racism in Britain than I do about [Centraal]", any kind of perspective, however attenuated, is still rare indeed in the epicentre of hi-tech hyperbole that is Silicon Valley.
"I go after things," says the son of a Scarborough council estate. "The world will pass you by unless you go looking for it."
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