Exit Interview with Scott Jones
Maybe this question contains its own answer, but why move to Hawaii?
You’ve been here, right? [Laughs.] Actually, Honolulu has more of a big-city feel than Indy does. It’s like a little corner of Manhattan—there are two Apple stores a few blocks from each other. There’s a small tech scene here, but it’s in its infancy, and I haven’t gotten deeply involved. I still consider myself part of the Indy tech community.
Any plans to ever reside here again?
I think of my Hawaii place as a second house, similar to what the Tobiases, Hilberts, and Simons have around the world. I still have my house in Indiana, and come home for Thanksgiving and things like that—about every four to six weeks. What can I say? I enjoy airplanes. All of my best ideas are scribbled on airplane barf bags.
So you haven’t entirely handed over your Carmel house to your Eleven Fifty coding academy?
No, but I’m in Hawaii most of the time now, so I decided to incubate the academy there [in Carmel]. We didn’t give the teachers and students access to the bedrooms or anything like that. But the great room and theater finally get used regularly. Now that the school has grown significantly, we’re looking to expand to another location.
How many students does the academy have?
We graduated more than 500 of them in the first year, and we’re considered one of the top 10 coding boot camps in the country. A lot of these boot camps are eight to 12 weeks and cost more than $10,000. Ours is much more affordable—a couple of thousand dollars. In a single week of 12-hour days, you can learn how to write an app like Tinder or Snapchat. We’ve had everything from truck drivers to computer-science majors take the course.
What’s the current status of your human-driven search engine ChaCha?
When Google changed its algorithm to push us down in the listings, it made it difficult for us to make ends meet. We’re operating in skeleton mode at this point—we had to close the office and let a lot of people go. So we’re looking for buyers of the intellectual property and data. For the first time, one of the big guys has taken an interest in human-mediated answers to questions: Facebook, with its new M service. Dozens of people have written to me saying, “Did you see this? Isn’t this ChaCha?” The answer is yes. The intellectual property we have—40 issued patents and 2.5 billion questions answered—should be of interest to them. We’ll see if they’ll meet with me.
How did the decline of that business affect you?
I had $32 million of my own money in it, so there was some financial pain. As far as the emotional impact, it was frustrating. Timing is everything in business. Sometimes the timing is perfect, as it was for me with voicemail. Sometimes it isn’t. I know I’m right about the power of human-mediated search. Algorithms are a long way from being able to answer questions the way humans do. Anybody can test that by asking Siri something—it’s only right 50 to 60 percent of the time. Decades ago, I was at MIT’s artificial intelligence lab. We were working on these same problems then! Marketers try to convince consumers that we’re close to imitating human conversation, but we’re just not.
How has the Indy tech scene changed in that time?
When I came back in the 1990s, it was almost non-existent. I was traveling around the state in my van trying to start a coalition of people interested in tech. I spent $1 million lobbying to get us daylight saving time, which we needed to connect with New York. I started the venture-capital firm Gazelle Tech Ventures. And whenever I could get an audience with the governor or mayor, I tried to convince them of the importance of direct flights. Austin added the daily “Nerd Bird” flights to San Francisco 30 years ago, and it’s the only reason they exist as a tech hub today.
What else is standing in the way of the Indy tech scene?
You probably saw the IBJ article that said we raised $50 million in venture capital last year. Well, that’s great, but nationwide it was $50 billion. So we’re getting 0.1 percent of the capital and we’re 2 percent of the country’s population. Our cut should be $1 billion every year! Capital formation is still anemic in Indiana.
So the swagger surrounding the tech scene here isn’t entirely justified?
Well, it went from zero to something. But we’re nowhere close to where we ought to be.
What tech companies are you impressed with in Indianapolis right now?
I like the ground-level startup scene. I like what Matt Hunckler is doing with the tech community group Verge. It feels like what I experienced at MIT. There’s a lot of risk-taking and interaction. Mobi, HC1, Bluebridge, ZergNet, DoubleMap, Lesson.ly, The Odyssey, and Tinderbox have all impressed me. ExactTarget did an amazing job in some ways, and I don’t want to take anything away from them. But for a $2.5 billion exit, I would have expected much bigger paydays for the founders in Indiana. They had watered down their ownership so much with outside investment. When my voicemail company went public and sold, my partner and I owned 40 percent of it. [That would have amounted to $1 billion of the ExactTarget sale, compared with the $93 million total taken home by the top six executives there.]
What advice would you give a young tech entrepreneur?
Take risks, and develop strong relationships on the coasts. I have three college-age sons, and my advice to them is, “Connect with the mecca of whatever you want to do.” One of them worked for the IBM Watson team this summer. I spent my entire career making sure I knew people in Silicon Valley and New York. Eleven Fifty helps connect students with some of those folks. When I look at the calendar there, it seems like there’s something happening every day at my house.
It’s amazing the statues haven’t been toppled and the woodwork is intact.
[Laughs.] Everyone has been very respectful. I’m ecstatic to have the space I built from scratch used in the way I imagined. I just wish I was there more to participate.
