The question I get the most, far more than any other question, is “What does the name Terakeet mean?” We started the company 14 years ago, so that question isn’t easily answered in 30 seconds. My first post on “Inside Terakeet” is dedicated to this question. Terakeeters know that I like to tell stories. Here is ours.
Pre-2001 I introduced my co-founder Pat to the works and thinking of legendary investor Warren Buffett. Admittedly, Buffett is not an investor in technology, but that doesn’t mean that there isn’t much for technology folks to learn from the way Buffett has built his business. In 1962, with a few thousand dollars, Buffett began accumulating shares in a textile company called Berkshire. He owned 7% of the company for $7.50 a share and even though the company wasn’t succeeding, nearly three years later he had seen a 50+% increase in his investment.
Buffett knew that the breakup value (the value of the assets of the company) was more than the current share price, but the CEO of Berkshire wanted Buffett out. At an in-person meeting, Berkshire tendered an offer to Buffett for $11.50 a share. Buffett agreed. When he received the letter to confirm the sale, the share price was $11.375 (.125 less than what they had agreed on). Buffett, angered, didn’t sell his shares. I’ll get back to that in a second.
In 2001, Pat and I walked through another company’s call center on what is now the 4th floor of our Terakeet HQ. In the back of the call center was a speech recognition system that wasn’t being used by the call center employees. We thought that every call center should be utilizing speech recognition technology to answer basic customer calls and we thought up a piece of software that would provide the tool set to call centers to do just that. “All these people are out here chirping like birds. Why not take the data and have it talk back to customers via speech recognition instead?” Pat said to me. After a day of deliberation, we had our name. TERAKEET. The data, in the form of Terabytes, combined with those parakeets, speaking back to customers.
It took us a year to build the software. We were sure everyone would want it. Why wouldn’t they? We were building something for a huge market that everyone needed. Pat built it. It worked. My job was to sell it. In my first five meetings with major companies, no one bit. They liked the idea, but no one signed a check. One other problem: we were out of money. No, worse… we were deep in personal debt and it had become clear to me that no one was going to pay for this software. Pat and I had long talks where we considered our options. We both considered getting second jobs waiting tables or bartending. By this time, Pat was back living with his parents and I was sleeping at a friend’s apartment. Two years of work was gone.
We had greatly misread the market. The dogs didn’t like the dog food. Although there was a desire to have calls answered by non-humans and a capability for the call centers to build this themselves, the value proposition was not clear enough for companies to pay hundreds of thousands for our product. We’d built a product without listening to the customer. We’d yet to make a profit. The birds weren’t chirping any data back to customers- it was crickets. Terakeet was toast.
It wasn’t the last time we’d fail. After our voice recognition software went bust, we segued into a failed attempt at online marketing consulting — I’ll save those stories for future posts. But, we did keep trying and we weren’t willing to give up. In the several years after, we became more focused on influencer marketing. By 2010, Pat developed his second major piece of software that began pulling together the manual tasks of influencer marketing into one single interface. We had solved a measurable problem that nearly every company had: we built a software system to connect brands with influencers at a grassroots level, which had measurable impact on revenue. Our company began growing. We established a vision to be the number one company in the world when it came to connecting brands with influencers. I went on record recently saying that Terakeet would be valued at over $1 billion dollars in the next five years. We just put an offer out to our 150th employee. We don’t plan on stopping.
Now, back to Buffett. Instead of taking the discounted offer, Buffett continued to accumulate shares of Berkshire. The company continued its decline, while Buffett’s other investments flourished. By 1985, the textile company originally known as Berkshire was out of business. Toast. Today Berkshire Hathaway has revenues of over $200 billion dollars. Why keep the name of a company that failed and went out of business 30 years ago? Many have wondered over the years.
I can’t speak for Buffett, but I can guess. I believe when you make bad decisions or fail in business, those failures open pathways in the brain that never disappear. Aristotle once said that “A man cannot become great until he can see the root of his own downfall.” My guess is that Buffett keeps the name as a reminder of his failure, recognizing that his mistake in 1964 led to the magnificent company he’s created today, 50 years later.
We keep the name Terakeet and embrace it because it represents failure, resilience, and the values of our company today. This is the true story of the name Terakeet. As the co-founder and CEO, I have a sense more than ever that the story is only beginning to be told.