Deal Flow

Why Datarista chose to launch its data tech startup in RI, not San Mateo

Its new software product, set to launch on Sept. 1, will offer a way to integrate third-party data directly into cloud platforms in real time, targeting the $11 billion sales and marketing industry

Photo by Richard Asinof

Pat Sabatino, founder and CEO of Datarista, decided to launch his tech startup in firm in Rhode Island, not San Mateo, Calif. His new office space includes more than 50 feet of whiteboard.

By Richard Asinof
Posted 7/18/16
A new data software startup firm, Datarista, has chosen to launch in Providence, not San Mateo, Calif., and in doing so, to help to build a tech data hub cluster in Rhode Island.
When will Slater Technology Fund get the recognition it deserves for the critical role it plays in providing seed capital to startup firms in the Rhode Island innovation ecosystem? What are the opportunities to develop new sources of private investment here in Rhode Island to provide the necessary funds that can enable startup firms to cross the chasm to success in the marketplace? Is there a need for a more organized cluster group for the emerging tech industry in Rhode Island? What role can the colleges and universities play in promoting public-private partnerships that do not get hung up on who controls the intellectual property? Will Datarista find itself in competition with GE in its attempt to recruit new workers to its enterprise?
The way in which customer relationship management data has now become a staple of sales and marketing data enterprises raises an interesting potential nodal point: how could the same data tools and new software integration products become part of the public health enterprise in Rhode Island? Could it be used to track what happens to children who have been found to have elevated levels of lead in their blood, integrating data from platforms across their entire lifetime, correlating it with performance in school and beyond? Given that Zika is emerging as the next threat of a sexually transmitted virus, both from men and women, are there ways to use these new data tools to develop better messaging about Zika? Are there ways to track customer relationships between fast food and soft drink consumption and obesity and diabetes, integrated with specific research data?

PROVIDENCE – Walking down the half-flight of stairs at 300 West Exchange St. to attend the open house held on June 29 by the startup firm, Datarista, to celebrate its new office digs, was very much a descent into geekville.

The most prominent feature of the sparsely decorated office space was an array of whiteboard that stretched along an entire wall.

Datarista founder and CEO Pat Sabatino called it one of the largest whiteboard arrays in the city of Providence. “There’s nothing better than to give engineers 53 feet of whiteboard,” Sabatino told ConvergenceRI, smiling as he posed for a photograph in front of diagrams drawn on the whiteboard.

Sabatino has a lot to smile about these days. The 30-year veteran entrepreneur of numerous data startup firms, including Jigsaw, which was sold to Salesforce.com for $175 million, has chosen to launch his latest venture, Datarista, in Providence, not San Mateo, Calif.

The new software product, which is scheduled to launch on Sept. 1, provides what Sabatino believes is an elegant, cost-effective solution to a burgeoning data management problem: how to integrate third-party data in real time into customer relationship management, or CRM cloud platforms, in what Sabatino called a vertical Platform-as-a-Service, or PaaS, offering.

Datarista is targeting the $11 billion sales and marketing industry, and, to date, the firm has been in ongoing conversations with more than 70 data providers, according to Sabatino.

Datarista’s platform allows third-party data providers to automatically enhance customer data and provide prospecting data fully integrated into the end user’s business process, eliminating the exporting, offline sync and importing processes that sap time, money and effort from their customers while increasing data velocity by providing an on-demand experience, according to Sabatino.

“The Datarista platform is the first solution that allows data providers to link data into multiple cloud platforms via a single integration,” Sabatino said in a news release earlier this year, when Slater Technology Fund announced its $350,000 investment as part of an initial seed equity investment that has raised some $1.5 million in the startup company.

[For the uninitiated who may not speak geek, CRM, or customer relationship management software, is a category of software designed to help businesses manage customer data and customer interaction, to access business information, automate sales, marketing and customer support, and to manage employee, vendor and partner relationships, according to an online definition offered by Vangie Beal.

Similarly, PaaS, or Platform-as-a-Service, is a category of cloud computing services that provides a platform allowing customers without the complexity of building and maintaining the infrastructure associated with building an app.]

High on Rhode Island
Sabatino had originally planned to launch the new venture in San Mateo, Calif., but decided instead to locate in Rhode Island, believing that he could find the talent to hire for his firm right here.

Sabatino said that it was not an easy task, because, as he put it, in what could be called a geek metaphor: “There is no true sherpa who can point anyone” in the right direction to find the resources such as Slater, which Sabatino in turn praised for their guidance. [Sherpas are an indigenous people of Nepal, who have often served as guides to climbing expeditions in the Himalayas and Mount Everest.]

Here is the ConvergenceRI interview with Pat Sabatino, founder and CEO of Datarista, talking about why he is bullish on Rhode Island as a great place to build a tech startup.

ConvergenceRI: Why did you decide to locate Datarista here in Rhode Island?
SABATINO:
I’ve been working for 30-plus years in the data industry. More recently, I’ve been involved with SaaS [Software as a Service] and file computing.

I’ve been commuting out to the West Coast for close to a decade, working with various startups in San Mateo and San Francisco. I worked for Jigsaw, I worked for Salesforce.

For a long time, there’s been a belief that the talent for developers to build that stuff is out there.

And, it was probably true, in 2007 and 2008.

When it came time to do this startup, I had actually intended to do it in San Mateo. I actually had people picked from other companies that I had worked with.

I stopped, took a moment, thought about it, and challenged myself: do I have to go out there [to California] to do this?

I live in Narragansett. Can’t I do this here, in my home state?

I did a little bit of investigation; I did a little bit of poking around.

I live here; I was here two out of every three weeks. The third week I was out there.

ConvergenceRI: You have a family here?
SABATINO:
Yes, I have a wife and two kids in Narragansett.

I decided to make a run at [launching the company here]. I started thinking about [the fact that] every great tech center has a great university at its core. The Bay area has a number of fantastic engineering programs.

You go to Denver tech center, the Boulder tech center, they have the University of Colorado.

Austin has become a hub around the University of Texas.

Boston has a great number of universities.

We have talent here in Rhode Island. We have a great computer science program here at Brown.

And, the more I talked with people, I kept asking: what about the Brown students? They said they were going elsewhere to get jobs working in artificial intelligence and machine learning, in data science and robotics.

It seemed to me that if we did try and make a run at starting a modern technology firm here in file computing, that there would be people up at Brown that we could hire.

ConvergenceRI: Who have you found to hire?
SABATINO:
To that end, we hired a gentleman, who relocated from Boston to Providence, to take a job here.

We have hired two other employees, who used to commute from here to Boston, one from East Greenwich, and the other from Providence, to work [at Datarista.] They left their jobs and are now working here for us.

ConvergenceRI: How important was the relationship with Slater Technology Fund in launching Datarista? I believe that the investment strategy by Slater in new companies in Rhode Island has often been undervalued.
SABATINO:
I totally agree with that. [At that moment, Slater's Thorne Sparkman called to check in with Sabatino about the open house.] Speaking of Slater, that’s Thorne Sparkman.

ConvergenceRI: Do you see Datarista as the beginning of an emerging tech hub in Rhode Island? Is the talent here?
SABATINO:
I have been impressed by the talent here. Certainly there are some great designers coming out of RISD. That often gets overlooked when you are doing user experience. I have been impressed by a lot of students around Johnson & Wales [and URI].

I have hired two Brown interns who are computer science majors, who won the hack at Brown.

ConvergenceRI: In your opinion, what are the next steps needed to create a tech hub here?
SABATINO:
That’s the other part of this. When you talk about all the pieces that are in place, yes, they are here, but sometimes it’s hard to find them.

There’s Founders League, there’s the Providence Geeks…

ConvergenceRI: Do you attend the Providence Geek dinners?
SABATINO:
I do. Jack [Templin] hasn’t had one in a while. We go to the Founder’s League [breakfasts at Olga’s]. There are pockets.

[From our view], we have a company, we’ve gotten this up and running.

There are entrepreneurs, such as Ted Brown, at SalesBrief [who came out of Andera], they are out there, they are trying to get roots and reach the point where we are at right now.

But, sometimes, just trying to find all the resources, it’s like there is no true startup sherpa who can point you [in the right direction in Rhode Island] and say, this is how you get to Slater, this is how you get to Angel Street Capital, this is how you get to the R.I. Department of Labor and Training program for hiring interns.

ConvergenceRI: Where is Datarista on its path to success?
SABATINO:
We’re still building product. It’s a very complex product. The company was incorporated on July 1, 2015, and we're almost 12 months in. We’re launching our product on Sept. 1.

We’ve raised more than $1.5 million in seed equity financing, and we are putting all of that into building our product.

We have four full-time employees, three open positions, two interns, three local contract workers that we are paying by the hour until we can find full-time staff. We’re building, building, building.

ConvergenceRI: Can you describe the product, in your own words?
SABATINO:
It’s a [software product designed] for sales and marketing providers that enables them to connect their data to the most popular CRM data marketing systems.

The problem for data providers is that, for years, they have shipped data to humans, [who then use software] to load it into various systems warehouses.

But now, that software is becoming cloud software, and cloud software is expensive.

The expectation of the people who use those clouds is that these products will be integrated with them, you don’t have to do any syncing, you put it in and it works, just like an app on your iPhone.

But data providers are not software companies, and they can’t get there. The other problem is that not only do they not know how to make software, the number of clouds is expanding. It is going to cost them a half-million to a million dollars per cloud to build out integrations.

As we get to 15, 20 clouds now, and one day, 40 or 50 clouds, the economics of building these integrations don’t work for them any longer.

ConvergenceRI: Who are you competitors?
SABATINO:
Our competitors are the old way of doing things, the old-fashioned service bureaus, the people who do custom systems integration work for platforms and ETL [extract, transform, load] software providers.

What we’re actually doing, in my opinion is we are making a vertical PaaS [Platform as a Service] product.

PaaS has existed for a long time, without verticals. Now we’re reaching a point where the cloud has become large enough and people are carving out verticals to do customized PaaS to solve specific use cases.

For us, we’re picking the data industry, the commercial data industry, it’s where I come from, and we’re providing a path solution for those data providers to better serve their customers. There are six fundamental use cases for data that cover 80 percent of that market’s needs.

ConvergencERI: Will you license your product?
SABATINO:
 Customers will white label it as their own. We are talking with more than 70 data providers right now who will white label [our product] as their own integration.

ConvergenceRI: Is there anything that I haven’t asked that you would like to discuss?
SABATINO:
I think it’s important to note that we are very pro-Rhode Island. I use Washington Trust as my bank; we are backed by Slater. Even at this open house, it’s Rhode Island beer and wine that we’ve put out. We’re really here to show everyone that we can make this in Rhode Island.

One more thing. My company is out of the gate, we’ve gotten off the ground; we’ve gotten wind under our wings.

I’ve been advocating that there needs to be programs and structures from the city and state to help the people who were where I was a year ago: things like office space, legal advice, things to help them understand how to get an idea and [transform] a Powerpoint into a business. That’s the kind of resources I think we need to formalize and to coalesce into a more coherent community. That would be great.

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