Rearden Commerce: Time For The Adults To Come In And Clean House
Michael Arrington
42 comments »
Silicon Valley based Rearden Commerce is a company that I’ve spoken to a few times over the last year to hear what they were up to. They are well known in enterprise/business solutions circles, and in a few months they are going to put one very large footprint down in the consumer space as well.
The best way to describe Rearden Commerce is “mashups for adults.” Like some very early stage startups we profiled last week, they are targeting global services - hotel, airline, restaurants, rental cars, shipping, event tickets, and parking. Eventually they’ll dip down deep into the long tail and include things like doctor and dentist appointments, massages, etc.). In total, services are roughly 60% of the worldwide economy.
Their strategy to date has been to sign large corporate customers and create customized websites for their employees. The service acts very much like a personal assistant. Set your profile up with the types of restaurants you like, whether you like aisle or window seats, and your preferred car provider, and Rearden will book all aspects of your trip for you.
See restaurants within a certain distance from your hotel via a Google Maps mashup (and based on Zagat ratings and cuisine), pick one, and the software will make a reservation for you through OpenTable. Then they’ll sync up with your calendar and your mobile device, and send you messages if anything goes wrong, like a flight delay. You can also access their mobile client to make changes to your itinerary. The interface is orders of magnitude beyond what Orbitz and other travel sites offer (click the screen shot for a larger view), and they’ll also book your restaurant and find you tickets to the Lakers game that night if you like.
Rearden will also keep track of reward miles and points from airlines, hotels, rental cars, etc., and lets users use those points to book additional travel and other services. Cancel a flight? No problem. Rearden keeps track of the credit in its system and suggests you use it the next time you travel.
They charge corporate customers a yearly fee that ranges into the millions of dollars, and are able to take a fee per transaction as well. Companies like it because they have to hire fewer administrative staff, and have excellent visibility into discretionary travel and entertainment spending (because it all goes through the site). Companies can also control costs easily - if they are having a rough fiscal quarter, they can simply turn off business class travel and expensive hotels.
Services are pulled into the system using whatever interfaces are available. This is a big problem (since they have thousands of service providers), but it’s also a huge competitive advantage now that they’ve done it. It will be very hard for anyone to scale to their size very quickly. No one else has even tried, so far.
Rearden allows employees using their service to create a personal profile as well, and plan their travel and entertainment that isn’t business related with a different profile and credit card. That service has proved to be massively popular. And so their next step is to offer the service to anyone through resellers. In 2008, they’ll release their own consumer branded service, too. They’ll also begin allowing smaller service providers to hook into their system (that’s when the doctors, dentists, flower shops, etc. will start to join in).
The company won’t disclose their revenues to me (no matter how many times I ask), but it’s clear that they already have substantial cash flow. They say they’ll be cash flow positive by end of year, with 340 or so employees (they’ll double from their current headcount of 160). The vast majority of their headcount are product focused and/or developers - the company still only has six sales people.
Rearden Commerce was founded in 2000 and has raised $100 million in funding from Foundation Capital, Oak Investment Partners and American Express. The American Express investment came late last year as part of a larger deal - Amex is now reselling Rearden Commerce to its corporate customers as well. This company is hiring like crazy.
Cool!
It’s great to see more B2B startups rather than just the usual ’slightly different’ social networking site.
These guys will make $cash$
yeah, well, they’ll be B2C very soon, too.
Very impressive; have never even heard of the company. When they hit B2C, they’re going to pull in an awful lot of business away from the incumbent competing players; probably including me.
One can only imagine what they’d be doing with 30-50 sales people…
Sound like a well-deserved IPO is going to be right up their alley in the next few years.
Thanks for the excellent profile on them, Michael.
Maybe next they’ll incorporate an agenda/calendar service and it’ll be a complete one-stop place for anything schedule related.. heck, they could even start linking business meetings to cab trips that you can pre-book.. Very cool
They seem to have an impressive customer list and therefore they must be doing something good.
I know rearden commerce as an enterprise spend management company providing ondemand service procurement. They have inbuilt approval and control process for administration purpose. Nice to see them move into consumer space. They already have the backend in place. My guess is they will be ready once they have the consumer centric front end.
Hey Mike how come TechCrunch isn’t naked ?
It’s “CSS Naked Day 2007″ .
http://naked.dustindiaz.com/
This will be helpful for those our industry and could make it easier to organize and quickly access important job related information.
Thanks for the review, we will explore this further.
It’s interesting to me that it’s so rare to find a company doing ’serious’ use of web services. Rearden looks like they’re doing something right, it just seems like they wouldn’t be the only one.
Also web services were supposed to be so easy you wouldn’t need a Rearden to help get you what you need. I think it’s probably generally safe to bet against technology issues being as easy as people claim they will.
They look very much like one of the possible “one-stop” travel shops that will be the model for the next step in the development of what is still a rather time consuming and cumbersome buying experience. With online travel on the way to a $ 100 billion industry their model puts them in a great position.
Good to learn about these enterprise outfits that can get big without a lot of attention. Their biz model looks good. But why the crticial headline? Doesn’t seem to fit with your wrtie-up.
I hear that that Reardon is a bunch of well thought out PR and have heard it called a “farce”. How can a BtoB application only have six sales reps out of 160 employees? Reardon started out with much greater ambitions but has faced reality and is now by all appearances an Expedia competitor. $100MM into it very few if any will see a return on this.
I have to somewhat agree with Curt. They haven’t made as big an inroads in the corporate travel world as one would think. Is it a sales problem? Not sure. Their founder’s roots were in corporate travel (from GetThere) so it’s one area they definitely started with. It’d be interesting to see what the depth of their product is like. Amex invested in them because Amex can’t figure out what to sell, perhaps Amex’s CTO product has reached terminal velocity. The picture shows more suppliers vs. customers.
Wow over 300 developers? If this is true then this company is a big player.
If not a big player, than at least a big spender.
Cash flow positive next year ? Is’nt that what everyone says when they are not breaking even this year !
They have had almost 7 years to reach break even, with 300+ employees I can see why they have not been able to do it.
Also, there “platform” is likely done the old way, ie a big fat unwieldy java app or a big fat unwieldy .net app (just a guess). In the mean time, all these little scripting environements are letter 2 developers do what it used to take 20.
I would use the services they’re claiming, and would like to see Patrick and his team rewarded for years of hard work.
But what Curt says above has been a theme among those people I know who have either worked or interviewed there. Don’t hold your breath for these guys.
Where’s your ear for a killer headline? It was right there in front of you — “Mashups for Grownups: — and you missed the dunk.
I’d like to see this company succeed, and the service could be very compelling. However, I second (or third) the remarks of Curt, MajorNetworks, and Paul. These guys have been around for a long time and their capital structure is ugly with 100 million already invested over many years. The type of people they can attract is limited by their valuation and upside. The vision is compelling, but there is a huge question mark about how close they are to the vision.
The reason they don’t disclose revenues is that revenues are not that high–the large customers they have are only using a small cross-section of their services, not the entire platform.
If they can pull anything off in the consumer space, I’ll be surprised and impressed. Hats off to Patrick and his team if that occurs.
You can read my analysis of Rearden Commerce here: http://sramanamitra.com/blog/639
This sounds like a great service, it’s amazing how fast they hooked so many service providers, I am curious about this business model and what their critical “push” was.
I am watching the online travel space as part of my research and it’s interesting how these “web 2.0″ sites started to popup everywhere. There is another site somewhat similar to Rearden, but it is totaly virgin, still in beta actually. Tripwiser.com . As of now, you can only get access by request. They provide thousands of predefined trip itineraries for travel inside the United States that you can customize. Don’t know if you can use it for mobile devices, haven’t tried it yet, but I am sure they’ll have to do it sooner or later to stay competitive. The site too is all fancy mashup and Ajax, cool Google map integration. The company is still very small, don’t know if they have VC backup, sites of this type take months to develop. Anyway, if someone is interested, here is the link: http://www.tripwiser.com
The word in the UE community and at BayCHI is that they’ve hired some key players from the UI and design world (e.g. VP from TiVo & Shutterfly, Creative Director from Meta, UI Director from Apple & Sapient). From what you said in your article, I guess they gearing up for a major consumer play, and decided they needed to break out of the b2b style interface. Hmmm.
In the image listing their partners, why is the curve showing their popularity approaching 0 as their inventory increases? Freudian slip of the mouse or is that really how things are going?
Honestly, it seems kinda lame…there are 8 billion ecommerce infrastructure/database info/professional corporate web design/programming shops. It seems like they raised a ton of money so they can hang around but I don’t see them meeting a serious demand that a lot of other boutiques and all in one shops can’t do already. And if there is a benefit to their turnkey solution for everything under the sun, it just doesn’t seem that disruptive to me.
..interesting hype piece but what’s up w/the title?
For those that seem confused about the title, it really isn’t that difficult to understand the intention, imo. The rough translation goes something like this: Many companies have tried mashups for “serious” purposes/ services and have done an ok job and covered some of the relevant services. But now, rearden has provided a solid interface to most of the desired services and they will “clean house”.
While the opinion is debatable (as always), that is what seems to be the intended meaning of the title. Next topic please.
I would like to hear more proof of the opinions above stating that reaerden is a “farce”, “vaporware”, etc. Any proof? By stating that rearden’s execution is less then functional, it seems like there’s a agreement around of the business model in general.
Anyone know if their execution is truly poor? If so, how did they sign-up those Fortune 500s?
this reminds me of a couple companies up here in seattle that raised a lot of money on the premise of high-dollar enterprise sales and then found they had really high churn and have re-oriented as low-dollar consumer social networking companies.
rearden might be going consumer because they’re enterprise customers aren’t sticking around.
bdb said, ‘Anyone know if their execution is truly poor? If so, how did they sign-up those Fortune 500s?’
..the same way B2Bs like Ariba, I2, Chemdex/Ventro did back during the go-go yrs..overpromising while underdelivering, and throw in a good chunk of equity while you’re at it.. All had reasonable, if not good, user experiences, but they suffered in terms of execution, scal and revenue generation..
welcome to web 3.0- where disparate web applications and services are intelligently and seamlessly linked.
I would resoundingly agree with Curt and the others that call Rearden into question. In the B-to-B context I’m guessing Rearden offers little incremental ROI over existing travel booking tools. What is the result of selling a “me-too” product for a highly non-strategic area of the business to reduce costs in one of the most highly commoditized spaces in the world? Is the addition of airport parking and the ability to book into a jazz club the game changer? As a comp, CliqBooks, which is the fastest growing corporate travel tool in the market was recently sold at a value of $67m. They too were able to add-in other services like airport parking, dining reservations through opentable and integration to leading meeting management tools. Rearden is likely 2-3 years behind CB in the B-to-B market in terms of customers and transaction flow even with AMX support. In the B-to-C area ditto above on the “met-too” with additional risk in the fragmentation of the market. Also, take a look at what Expedia, Orbitz and Travelocity have spent on branding and marketing over the last 4-5 years for customer acquisition. Where will that money come from for Rearden to acquire customers in the B-to-C space. What is it again that will be so unique in the B-to-C space? To top it all off, they have raised $100m making it hard to see how current and future employees will win and/or the VC’s. I;m shocked that any board of directors would give this 7 years and $100m without change at the top. Don’t they have a fiduciary responsibility to their LP’s? Hey Curt, did you say farce? Good one!
Why pay in house sales guys when you have all of the AMEX travel sales force working on your behalf?
Note: do not believe the hype- pure exaggeration… they have some developers, maybe 40 and they have massive attrition every 3 mos. Talaris was the last name - before that mykazoo.
I don’t know what to think anymore. Everyone still want’s to be the next ebay or google on the internet. How much more room is there to create somthing new and really go big? The site is put together well and looks like it has the makings of somthing big, I wish them the best! Dustin Garr Stratford, CT
Anyone but me notice something fishy about the screenshot?
Your search found 2 results
Page 1 of 3
4 results on page 1
La Folie (Mexican/Southwestern LOL)
Map arrow on Taylor and Paciifc, search on 1 Market, etc.
7 years into this project they should be showing real screenshots, using real service providers. 100M apparently buys you 40 really good Adobe Illustrator developers.
Besides having a neat UI, is anything you see here any different then yelp, expedia and google maps? Call me promiscuous, but I like to use best of breed, not mashups.
Best of bread is not always the best, some new startups does come with new ideas and invoate great solutoins. I’m using TripWiser beta for the last few weeks. The site is very simple and intuitive, something I’ve been waiting for a long time. No other place enables you to organize your trip like this. I already used it to plan a weekend in Carmel. It has some cool features you can’t find anywhere. For example I had a reservation for a nice dinner in a restaurant, the restaurant is 20 miles from Carmel and I was looking for a nearby hotel to stay for the night. In a click of a button TripWiser shows the list of all the nearby hotel on a fancy Google map and add it to your plan. I ordered the hotel right from the site. Another cool thing is that you can browse 100s of ‘ready to go’ trips, choose one and customize it based on your preferences. It was great to find how much valuable data they were able to collect. I’m planning a trip to Alaska and I’m focused on luxery style, TripWiser enable you to filter the trips exectly the way you want it and present me with some very interesting trips suggestions. Highly recommended.
Nice job Guy. That is now your second advertisement for Tripwiser on this forum.
Wow. Pretty impressive. Doctors need to get centralized before they start working with services like this.
another positive review for a pile of poo poo.
vc 100 mill, lol
don’t you just love it when they fail?
Cah flow positive my ass. $100MM in VC money will allow them to get away with that lie for a long, long time. My company has a travel website from some unknown travel agency that does 80% of what these guys offer. It’s only a “transformational business model” in the middle of a bubble…
Nay sayers should spend some time researching. Look a lot closer and you will see, this is not just an Online Booking Tool(OBT) for Travel. Not Java or .net-Pure SOA from the ground up enables it all. Rearden is years ahead and will not even be competing with the likes of C’book this time next year.
Has anyone heard of 3-4 years of stealth while R&D gets cranked up?
I think they’ve already BURNED THRU the $100M. I’ve also heard they had something like an 800:1 reverse stock split, totally screwing former employees out of their hard earned options. Bastards.