Zemanta Founder Talks to NJ Tech Enthusiasts via Skype

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About 70 N.J. and N.Y tech enthusiasts gathered at Audible’s Newark headquarters Monday, April 23, 2012, for an Audible “Tech Talk,” one in a series of technology discussions hosted by the N.J.-based company that was acquired by Amazon four years ago.

After ample time for networking, cold beer, hot appetizers and an introduction from Guy Story, CTO, the group settled down to hear from Andraž Tori, a co-founder of Zemanta. Tori wasn’t in the room, however; he was speaking to the group via a Skype video link from Slovenia, where it was 3 a.m.

To the audience, which included members of BrickCity Tech Meetup, Tori looked wide awake as he gave his energetic presentation and answered questions about how Zemanta had evolved into a program that helps bloggers. Along the way he shared interesting, funny stories about how the company went from its small market in Slovenia to a larger one in the U.K. and finally to the U.S.

Zemanta looks at web content from a semantic standpoint, determining what it really means. Bloggers generally download it on browsers like Firefox or Windows, or they download code or plug-ins for WordPress, Joomla, TypePad and other platforms. While they type their blog posts, Zemanta makes suggestions for additional content, links and tags.

This makes blogs more relevant and shareable, Tori said. The company is very sensitive about copyright and tries to keep the knowledge base broad.

Speaking about his revenue stream, Tori said, “We stumbled on a business model in 2010, but we should have done this much earlier … We had the idea that once we accumulated a million bloggers, then we would make money.”

However, the company didn’t need that many bloggers. Zemanta essentially advertises content to bloggers, who decide whether that content is valuable to them. If it is, they include it within their blog posts; if not, they don’t. “If a blogger chooses to include it, it’s an advertisement to all their readers, and it has been endorsed by the blogger,” which makes it valuable, he said. When a blogger selects a promoted article to link to, the company makes money.

Tori said he began his startup journey by transforming locally produced television programs into web pages, using the captioning developed for deaf viewers. Adding some natural language processing to the mix made the material useful, and “before we knew it, somebody bought something from us. So we said, ‘Why not make a company out of this?’ ” However, Slovenia was too small a market for the product, and the company wasn’t going anywhere.

Tori looked outside the country, to a U.K. accelerator called Seedcamp, and found it an invaluable experience. The company still faced the market problem. “We’ve found the world is getting smaller, and it’s less and less important where you are, but it’s not entirely unimportant,” he said.

Costs in Slovenia were much lower than those in the U.K., so after their Seedcamp experience and three months in the U.K., the founders went back to Slovenia, set up a development shop there and figured out how they would continue. At the same time they established a company in the U.K.

Tori recalled how they started buying servers on eBay and went to Ikea to purchase furniture. “We thought we’d have some moments of happiness,” but his cofounder went on a three week-tour of the U.S. market and came back saying, “We really need to focus on the U.S. and the U.S. alone.”

“We already had some European investors, but when we decided that this was the direction in which we were going, we started to look for U.S. investors.” After about a half year of fund-raising and trying to determine where it should be located, the company connected with Union Square Ventures (New York).

That’s why they decided to make New York their U.S. base, Tori said. A cofounder moved to the U.S. in 2009. There then ensued the slow process of developing partnerships and figuring out how business is done in the States.

Concluding his talk, Tori entreated startups to seek out an accelerator experience, calling the mentoring invaluable. He advised that startups go where the market is. He added he was excited by the prospect of technologies like Siri and Watson to transform humanity, and optimistic about future prospects for personal writing assistants like Zemanta.

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