Start-Up Clarabridge Takes the Capital and Scores

Ted Leonsis a few years back provided the best description of venture capital that I ever heard.

The former AOL mogul compared the exercise of investing in start-ups to drafting hockey players for his Washington Capitals.

Out of 10 picks, several don't work out or are just average. One or two are maybe above average. One is really good. And every once in a great while -- just maybe -- you get an All-Star like Alex Ovechkin.

Ovechkin is the NHL version of a Google, the hugely profitable online search site.

Sid Banerjee, a well-known local entrepreneur who is on his third start-up, isn't calling his venture-backed Clarabridge Inc. the next Ovechkin.

But the growth of the Reston firm provides a peek into how businesses get funding from venture capitalists, hoping to hit the "set for life" home run that makes everybody rich.

Banerjee has done quite well for himself. A 43-year-old graduate of the Massachusetts Institute of Technology, he lives near the wealthy Foxhall area in the District, has a second home and a boat, and -- by my estimation -- is worth tens of millions.

Banerjee was one of the founders of MicroStrategy, the McLean-based software company that specializes in business intelligence. He left MicroStrategy in 2001. Then he started and sold a computer software company called Claraview (from the Latin root meaning "clear") in 2008 to a Dayton, Ohio, firm for millions.

Banerjee is now building Clarabridge.

The company started around 2004 when Banerjee and a couple of partners put up $1 million from their Claraview earnings. Clarabridge specializes in sifting through truckloads of customer feedback that originate online, on paper or in telephone calls. His clients include big pharmaceutical firms, financial services companies, and hotel and retail chains.

Clarabridge drills down for nuggets like these: "Your best airline passengers don't like paying for wireless in the frequent flier lounges." Or, "A few people are gumming up your call centers because they recently had a death in the family and can't figure out the tax effect." Or my personal favorite: "Your hotel customers think the air conditioners in the rooms are too loud."

The company is able to uncover that information through a technology known as "natural language processing," or NLP.