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June 05, 2006

Upromise sale to Sallie Mae

I would be remiss if I didn't make note of last week's announcement that Sallie Mae is acquiring Upromise, a great outcome for the company I was privileged to co-found alongside Michael Bronner 6.5 years ago and serve as president and COO.  One of my early investors called me and pointed out that for a height-of-the-bubble-era investment (we closed a $34 million series A in March 2000 with a very lofty pre-money valuation, despite being a handful of folks and some fancy Power Point slides), it is miraculous that he was able to make some money on the transaction.

I learned many lessons during my three years there and even beyond as I stayed close to the company's evolution after I left to join IDG Ventures.  One important lesson is that no one person "makes" a company - it takes a village.  My high school football coach had a favorite line:  "Victory has a thousand fathers, but defeat is an orphan".  Similarly in any successful entrepreneurial venture, there are a thousand people that "make" the company, and I got to see this in spades at Upromise.

Another important lesson is that every entrepreneurial venture is a winding journey with many ups and downs and many phases of life.  There were times when we thought Upromise was going to be a world-changing company and there were times when we thought we would need to shut out the lights after burning through a hundred million dollars.  In the end, the passion of the employees, partners and customers and the perserverance of the investors saw it through to a happy outcome for all.  Congratulations to everyone involved.

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"Success has a thousand fathers, but defeat is an orphan" -- the message there isn't that it takes a thousand people to birth a success, but instead that a thousand will claim credit for it, while nobody will claim credit for failures.

It does take a village, though.

Dear Sir,

I would be ery interested to know :

(i) How you convinced major supermarkets to periodically give you customer purchase information (i'm guessing the information was extracted from purchase details accumulated from supermarkets current loyalty cards.

(ii) what changes did other companies need to make to be able to forward you details of customers who made purchases (eg did you need to compare a database all of the companies customers with a list of customers that have signed up to upromise ?

I'm generally interested in the technology behind upromise and hoe you convinved major companies to be part of this innovotive company.

I guess that I'm having a difficult time understanding the synergies created for Sallie Mae with this purchase. To me it doesn't make sense.

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