Ali Davar was in his last year of law school at the University of British Columbia when he had an idea. Excited, he walked across campus to the Laboratory for Computational Intelligence, where he met with an expert in machine learning.
What he pitched to the professor was a different way to search the Internet. His idea was less about searching than it was discovery: While services like Google delivered B when users asked for B, Mr. Davar wanted to put more focus on A and C – the related ideas, topics and products dancing on the periphery.
Soon enough, a start-up emerged, backed by $4-million in angel funding and government grants. But after four years of work, their efforts to establish a niche search engine in a world dominated by Google were going nowhere, and the difficult decision to scrap the project was made.
While the enterprise might have failed, the idea lived on. By early 2010, the decision to drop the search engine was made and the technology was rebuilt. Now, Mr. Davar and his small team of computer scientists are responsible for a popular new app on the iPad: Zite, a “personalized magazine” that over time learns the nuances of a person’s reading tastes. The app was an instant hit when it was released in March. Bolstered by positive reviews in tech publications, Zite reached No. 1 in Apple’s rankings of free apps in its first two days and was downloaded more than 100,000 times in its first week.
The fortunes of Zite Inc., which is in talks to raise at least $10-million in venture capital this spring, are being closely watched by the technology sector in Vancouver, a city that is hungry for a winner. With its respected universities and attractive surroundings, the coastal city has the potential to draw top talent and become a global tech capital. Vancouver is already strong in video game development and has scored some success in business software, but in the wildly hot realm of consumer websites like Facebook and LinkedIn – whose stock price more than doubled on its first day of trading last week – it has seen few success stories.
In the city’s Yaletown neighbourhood, a collection of old brick warehouses near downtown, numerous upstart technology companies have come and gone. Zite, holed up in a small unmarked office cluttered with whiteboards covered in mathematical formulas, was nearly among the failures. But now that it has scored success, it faces even greater challenges. It walks the line of content ownership – Zite’s app repackages information owned by others – and has already attracted the legal ire of some of the biggest publishers in the United States. And it faces a hotly competitive market as iPads become ubiquitous and consumers seek new ways to digest a constant barrage of information. Indeed, apps such as Zite are in a race to build what tech commentators call the “Daily Me.”
The company is already trailing a larger, better-funded competitor. Palo Alto, Calif.-based Flipboard Inc. raised $50-million in April, valuing the company at $200-million, and it has the backing of some of the biggest names in Silicon Valley and Hollywood: venture capitalists Index Ventures and Kleiner Perkins, Twitter creator Jack Dorsey, Facebook Inc. co-founder Dustin Moskovitz, Oprah Winfrey and Ashton Kutcher.
Flipboard’s app – an attractively designed “social magazine” – was a fast winner when it launched in 2010. Apple Inc. named it the iPad app of the year. It has focused on quality of presentation and doesn’t rely on algorithms, instead delivering a person content connected to their Facebook and Twitter accounts, as well as from mainstream publishers that pay to be featured.
