← Back to stories

Beyond News Inc

// Created: 1996-1997

Beyond News Inc 1996 to 1997

I left Apple in June of 1996, after my rollout of QTML for QuickTime at WWDC, to create a new startup focusing on my consumer shopping idea shared in the DESHAW story. I was joined by a non-technical co-worker from Apple, and another person who was a previous CEO of Macromedia. We started by refining our goals and started talking to potential investors and other startups who could be part of the ecosystem. We playfully called the shopping engine "QE2". Among others, we talked with Yossi Amram who had just made substantial wealth for himself through the IPO of Individual Inc, in March of 1996 but had also been ousted by his Board soon thereafter. Although we had already invested a lot of energy planning for the shopping engine startup, under Yossi's guidance, we pivoted to becoming an interactive news provider with a social media twist where all of our users could comment on the news feed and on each others comments, and formed the company Beyond News Inc on June 20th, 1996. Yossi introduced us to Marc Pincus and Sunil Paul, the two founders of FreeLoader Inc that Individual had acquired in June of 1996.

Yossi introduced us to Reed Elsevier, a British company that had been instrumental in the development of Individual Inc's products, and Reed, in turn, introduced us to Lexis-Nexis, a company they had recently acquired, which at the time had a substantial business aggregating global news feeds, mostly from print media that was unavailable online. We did a field trip to Lexis-Nexis in mid to late September of 1996 at their main offices near Cincinnati Ohio. When I had discussions with their technical staff, they claimed that their information database (10 TB) at the time was (1) bigger than the entire Internet, and (2) growing faster than the entire Internet. They wanted web-crawler capability to scrape and index the Internet continuously to feed their news database, and they were also interested in our social media aspect of interaction of ordinary citizens with the news feeds. I also learned from their technical staff: 1) that their primary client, for many years, had been the CIA, 2) their mainframe was an IBM, with custom DASD drivers, and 3) their database was completely developed in house, was substantially higher performance than any commercial database on the same hardware, and that they had written the custom DASD drivers to improve the hardware performance of their datacenter. We secured a $75,000 contract with Lexis Nexis to develop a web front-end for their news feeds. The project officially kicked off in mid-October 1996 with another meeting at their headquarters. The initial prototype of the product was shown to Lexis-Nexis shortly after Thanksgiving, and we invoiced them against the contract milestones.

Not all was rosy -- by mid-December 1996 I was completely devoid of cash and my credit cards were all maxed out ... it was perhaps the same for the other two co-founders, but ... I had the knowledge, from my regular contacts with Lexis-Nexis that the first two payments against the invoice had been posted and distributed, but I got none of it. I felt this was a betrayal, I did not want excuses, and I did not want to negotiate -- the betrayal and loss of trust was already evident. I quit on the spot and formed Charlton Innovations Inc the very next day (24th December 1996). On the advice of counsel, I did not communicate with the other two founders until after New Years 1997 -- to let them stew in their own juices for a bit, as it were.

Hardball 101

Once I resumed communications after the new year, the other two founders still wanted me to complete the prototype, and my deal terms, on the advice of counsel, were I had to be paid in advance for every week I contributed to their initiative, that I would receive physical custody of my vested share certificates with each milestone completed, and that the continued engagement would be B2B via my newly formed consulting company. We also negotiated continued vesting of my founder’s shares, ensuring that my equity position would not be eroded by their financial maneuvering—vesting would be tied to product milestones rather than the traditional four-year time-based schedule. I had the leverage, in that the other founders were non-technical and could not complete the contract with Lexis-Nexis without my help, and my proposal was take-it-or-leave it. I finished the prototype in mid-January and agreed to continue on other aspects of the project with them, in parallel with my other new consulting jobs (Sun, Magnifi, and others). Up to that point, our other potential investors, Yossi, Mark and Sunil had not yet gotten much liquidity from the Individual Inc IPO and FreeLoader acquisition due to lock-up terms from the underwriter.

Sometime in February 1997, BeyondNews received an angel tranche of $100,000, and then raised a venture round an initial one million dollars in June of 1997, all based on the premise of the collaboration with Lexis-Nexis. Between January and June, I kept working part-time with the BeyondNews founders, creating manuals, training material, an incorporating additional API for the newsreader. After the venture round closed, BeyondNews hired a new VP engineering, and he brought in a team of about 20 engineers, literally overnight. I spent two days a week at their new engineering office for the next few weeks bringing everyone up to speed on the project. After the July 4th 1997 holiday, I was told my services were no longer needed due to their new hires, and that my contract was being terminated for convenience. One of my co-founders reiterated the termination for convenience in a written email to me. They did not pay my final invoice, or send me my remaining shares.

Deja-QE2:

What I heard in late July is that Lexis-Nexis had terminated the relationship with them (one of my friends at Lexis-Nexis said his team did not like how I was treated, and that was a factor in their decision to terminate the overall relationship), and their new VC investor, pissed that the rug had been pulled out from under them, was threatening a lawsuit to get their money back. I later learned that the team at BeyondNews brainstormed and convinced the VC that a pivot back to QE2 shopping engine was a profitable way forward. They changed their corporate name to "C2B Technologies Inc" very soon thereafter.

I heard nothing from them, or about them, until July of the next year (1998.) That's another story in its own right, written about C2B Technologies, Inc.

  1. Marc Pincus went on to found Support.com (IPO 2000), Tribe.net (tech acquired 2003), and Zynga Inc (IPO 2011), and invests now via Reinvent Capital.
  2. Sunil Paul went on to found Brightmail (acquired 2004), Sidecar (ridesharing), and Spring Ventures.
  3. Yossi went on to found Valicert, which had an IPO in 1999.