This was the final paper of a course I took at the Stanford Graduate School of Business in Spring of 2009. The class was on technology and science based startups and it was half MBA students and half graduate students in engineering or science. The MBA’s conjectured about how’d they run the company, and the grad students called BS on the MBA students when they went out of line.

it was fun =)

It was taught via the case method which I enjoyed. The final projected tasked students to interview the founder of a startup and then write a business analysis of it. I thought this was pretty good given what I knew about startups and the info I had on the company.It turns out Aardvark never specialized and still succeeded (they got acquired by Google in February of 2010).

Ultimately what matters a lot more that business analysis is the execution to build a successful business – still it’s fun to crunch the data sometimes. Enjoy!

Aardvark Overview

Aardvark is an early-stage startup company focusing on “social search” and helps consumers with subjective questions get useful, real-time answers from people within their social network.

Aardvark was founded in late 2007 by Max Ventilla, Damon Horowitz, Nathan Stoll, and Rob Spiro. They raised $2M in early 2008 by issuing convertible debt to angel investors like Google executive Joe Kraus, Stanford University professor Rajeev Motwani, and Napster cofounder Shawn Fanning, which they used to build a small engineering team. In September of 2008, August Capital led a $5.5M round of funding, which included investments from other VC firms and angels.

Max Ventilla has a BS in Math, a BS in Physics and an MBA, all from Yale University. He spent a few years working with the CEO of a $2 billion classified media business before moving to Google for several years until he founded Aardvark.

Damon Horowitz is a recent Stanford Computer Science PhD who oversees product development and research strategy and has started several other high tech companies. Nathan Stoll worked as a Product Manager of Google News and has degrees in Computer Science and Political Science from Stanford. Cofounder Rob Spiro leads quantitative and qualitative user research initiatives, has cofounded two tech startups and has a BA in History from Yale.

Aardvark is based in San Francisco, has 16 employees, and is in private beta: new accounts can only be created through invitations from existing users, limiting the number of people in the system. Aardvark provides multiple ways for people to interact with its services, mostly revolving around IM clients such as AOL Instant Messenger, Google Chat and others. In my experience using Aardvark, my queries result in 1-3 answers of varying quality within five minutes of the query and I receive between 5 to 20 queries a day related to topics that I have indicated knowledge of.

Personal Impression

My impression of Aardvark is that it’s a group of people with a great idea: create a system to help people find answers to “un-Googleable” questions, from people they trust. I think this idea can turn into a business if it focuses on finding paying customers and executes well, but right now it seems like a technology driven company that has a very broad market and zero revenue.

Product, Service, or Platform – While Aardvark provides a service to its users, it can be better understood as a platform, like Fuel-X, Facebook and Trulia because it has a broad range of applications and different people will use it for different purposes. While this makes Aardvark an exciting place to work, there is the danger of getting distracted and stretched too thin by the multitude of applications.

Strong Market Demand – There is a huge demand for the service that Aardvark provides. According to Max, 25-40% of all the searches done on Google (his former employer), are what he calls “subjective search” queries. Queries like “What are the coolest places for a vegetarian to eat around Stanford?” cannot be answered definitively by Google, but could be answered by someone who is familiar with the Stanford area. I think the possibility of being a better alternative to billions of search queries puts Aardvark in a strong position as a company. However, demand does not equal profitability, or for that matter, revenue.

Trulia also had a huge market in which it could provide value: buyers and sellers of homes, but were not able to make money off of their service because of the industry’s other players. Aardvark’s problem is not the industry, it is figuring out who will pay them for their service.

Tentative Business Model – One of the biggest weaknesses of Aardvark is their lack of a clear business model. Max saw two opportunities for monetization:

1) Affiliate links – where retailers would pay Aardvark for any transaction that came directly out of a query/answer on their system. For example, if someone recommends a book on Amazon and the querier purchases it, Aardvark could make a small profit off of that transaction.

2) Sponsored answerers – where people interested in answering particular questions pay to respond to certain queries, somewhat like “Sponsored Links” on Google. For example, a real estate agent might want to answer all questions related to “buying a home in Brooklyn”.

It seems that most internet companies are still not focused on revenue, but focused on producing a popular product, and then hoping to make money off of the traffic or user interaction with the site or service. I recognize that they have the means and desire to take their time in making a rock solid product before trying to make money. However, if I were a founder, generating revenue is something I would spend a lot of time thinking about and working on as the platform grew in features and in usage.

Moving forwards

Aardvark has gotten off to a good start – they have a technical founding team united behind the concept of “social search” web applications, they have the support of big name investors and VC firms, great press coverage in Business Week, TechCrunch and other media, as well as a working product.

In the long-run, I do think Aardvark has the potential to make a real impact on how people find answers, market products and services, and build personal credibility. If I were running Aardvark for the next year, my goals would be to 1) Reduce risk, which I will discuss further below and 2) Select a narrower target market to focus on.

This second goal is important because I don’t believe Aardvark can be all things to all people, but would be better served in targeting a smaller knowledge or opinion driven market, like fashion designers or IT employees. A focused target market would allow Aardvark to tailor its platform features to provide a great deal of value. Fashion designers would probably want the ability to send pictures along with their queries, while IT employees might want to send queries directly from certain software.

Risk Factors

Technical risk – Aardvark has created a basic version of their product – allowing users to ask “into their network” on various questions and receive a response. However, a great deal of Aardvark’s value proposition relies on its ability to do two things:

1)   Parse natural language questions for the right topics. While the current product is unexpectedly good at this, it will need to be much better before it can really compete with human interaction.

2)   Determine the areas of expertise of online users. The current product connects user queries to people who claim to have expertise on a particular topic, without real validation of the claim. The power of Aardvark will be connecting queries to people who have demonstrated, through their online activity on social networks and blogs, their areas of expertise.

Market/User Risk – The company must prove that users will use their platform for their finding query answers. Consumers have many choices for answering their questions, (friends, Google, Yahoo Answers to name a few), and it will be important for Aardvark to demonstrate that people are willing to move their searches to this platform, and that they find it valuable enough to use it consistently.

Business Model Risk – Finally, if it desires to continue as an independent organization (which I would want if I were running the company) Aardvark must prove that it can make money from this service. Earlier I described their two proposed revenue streams: affiliate links and sponsored answerers. Beyond these, I think selling user data on queries, the ability to charge for “expert answerers”, and basic advertising targeted towards the query information are other revenue streams to pursue.


The founding team is young – only Damon Horowitz, is likely older than thirty. However, all members have experience working in either start-ups or successful internet companies, so I think will have they will be able to stay in senior management roles in the company for quite some time.

Max indicated that his role in the company was managing the public face of Aardvark as well as determining the internal culture. Decision-making at Aardvark is spread throughout the company – Max said that no one person was responsible for determining the product, which explains why they may not have focused on a particular market. The company looks for “Smart, type A individuals who go into meetings looking to be proved wrong”. They also hire for generalist, jack-of-all trades engineers instead of specialists.

This demonstration to be flexible and follow the demands of their users is admirable and a smart move as they first figure out their product and market. But in the next two years, I would look to begin hiring for more specialized engineers based the strategic direction the company decided on.


Aardvark has two exit options: an IPO or an acquisition. Which path it takes depends largely on how many users they can obtain, and how much revenue they can generate off of these users. If it gets lots of users, it can become a strategic acquisition for a bigger firm like Yahoo, Microsoft, or Google. If it can generate lots revenue per user, an acquisition is also possible. Only if it can demonstrate both is an IPO a consideration.

“The Marine Corps’ style of warfare requires intelligent leaders with a penchant for boldness and initiative down to the lowest level. Boldness is an essential moral trait in a leader Initiative, the willingness to act on one’s own judgement, is a prerequisite for boldness. Not only must we not stifle boldness or initiative, but we must continue to encourage both traits in spite of mistakes.

Relations among all leaders – from corporal to general – should be based on honesty and frankness regardless of disparity between grades. Until a commander has reached and stated a decision, subordinates should consider it their duty to provide honest, professional opinions even though these may be in agreement with the senior’s opinion.”

Warfighting – Marine Corps Doctrinal Publication 1

We thus conclude that the conduct of war is fundamentally a dynamic process of human competition requiring both the knowledge of science and the creativity of art but driven ultimately by the power of human will.

Warfighting, aka Marine Corps Doctrinal Publication 1