Thursday, March 4, 2010

Entrepreneur employs SDM lessons in business launch - SDM Pulse Spring 2010

By Ken Huang, SDM ’05

I have always wanted to become a successful entrepreneur, and with the help of MIT’s System Design and Management Program (SDM), I am now well on my way. I founded Sayagle Inc. in January 2009 to meet the need I saw for an online social marketplace—a one-stop site that combines the best elements of such websites as Facebook and, but with new features that are uniquely our own.

Our mission at Sayagle is “to provide a location-based virtual marketplace that empowers friends, family, and merchants to enhance life beyond the screen.” What that means is that rather than go to Facebook for social networking, Go Daddy for e-commerce hosting, and Google Latitude for online and mobile advertising, for example—you can do it all at Sayagle. And, the information we give users is relevant to where they are— so they don’t go looking for Korean restaurants in Boston and find ones in Chicago.

Already the company has a staff of 34 and about 30 paying business customers. (One of our first clients, nexiwave, is a professional conference call services company founded by SDM alums.)

How did I get here?

Like virtually all SDM students, I arrived at MIT with several years of business experience already in hand. A software engineer by training, I had worked at Lucent Technologies and Nortel Networks, and had risen to the position of assistant vice president for technology at JP Morgan Chase.

But the skills I learned at SDM—and the people I met there—have helped me to take my career to another level. For example, the class in system architecture helped me to identify object protocol model (OPM) attributes and define value. At Sayagle, we are creating value-added services for consumers and merchants simultaneously—users can purchase items or services at the best prices, and merchants can reach their target audience quickly and with significant sales volume.

We’re doing this by creating a symbiotic relationship between merchants and consumers.

Sayagle merchants provide the content and conditions of their deals to Sayagle, which in turn promotes the deals to users. Sayagle’s proprietary recommendation engine passively observes and adapts to the social networking behaviors of both user and merchant and then matches consumers with the best deals and merchants with the best customers.

This recommendation engine is a key Sayagle difference, and I was able to create it thanks in part to the statistical models introduced in Engineering Risk Benefit Analysis, an SDM class taught by Professor George Apostolakis. Sayagle maps the selections that a user has made in the past and uses a proprietary algorithm to identify the degree to which he would like a certain item that he has not seen yet.

The engine intelligently matches the items that have the highest probability score for user purchases, providing the merchants with the most relevant cities with the highest density of a target audience for its product offerings. Simply, it matches the users and merchants with the highest success rate for reaching a business transaction at any given time.

Once I had developed my business model, I evaluated the competitive landscape using tools taught in SDM’s class in product design and development. Understanding all the critical path variables in my system and staying attuned to all of my competitors will help me to keep Sayagle on course at all times.

I have also used systems dynamics and system architecture principles in building the company itself. I took a holistic view of workflow and filled in-house jobs as necessary—beginning with developers, who needed to be employees because we’re still in a stealth mode—and was able to get the technical team up in four months.

In launching Sayagle (which is largely self-funded), our goal is to provide a paradigm shift from traditional broadcast-based advertising to social-based and proximity-based advertising. I believe e-commerce is the future for all business, and having a web presence is essential. So, in order to grow our customer base, we are providing free web hosting services to many users to bring them on board. Currently, we are focusing our attention on small and medium-sized businesses, which understand the importance of having a web presence and are seeking affordable payment plans.

This initial application, which we call Sayaglify, not only provides funding for the company, it forms the beginning of the merchant community that we need in order to provide interactive communication between consumers and merchants. This site is already up and running. The next application, launched in February and called Sayabit, provides consumers with remote content storage (e.g. for photos). To seed this group and build our base of consumers, we are currently offering free hosting to student groups.

Sayagle itself will connect these two groups, providing instant messaging, web, and mobile access to all the site’s features. Data portability will be a key feature within the Sayagle domain, with users able to access or share personal data and provide location-based contextual information via mobile devices.

It is, I hope, a systems solution to the expanding problem people face of having too much electronic clutter in their lives.

Much work remains to be done, but I am confident that with SDM’s toolkit, I have put Sayagle on the path to success.

Editor’s note: The SDM Pulse will monitor Sayagle’s progress and provide readers with updates on the business in future issues.

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