AskMe has answers, profits
by Cydney Gillis

BELLEVUE -- Let's say you had a need for an industrial lubricant you could eat.

Not that anyone would eat machine oil. But it's the type of question that Bellevue-based AskMe Corp. lives for -- and has actually started to squeeze a profit from.

Three-year-old AskMe sells networking software that helps corporations answer difficult questions. In this case, a manager who was building a cereal plant in South America realized that the region's hot weather could cause machine oil to drip into the product once in a while.

The manager turned to the internal network AskMe had installed, typed up his inquiry and sent it off to a set of company engineers listed in the system as being experts on lubricants. One of them responded in short order with an answer -- a lubricant made by Texaco.

AskMe's 34-year-old chief executive officer, Udai Shekawat, chuckled over the story, but he wasn't keen to name the cereal maker. The company, however, is just one of a small set of big-name clients, including Microsoft, Procter & Gamble, Ford, Gerber and Honeywell, that AskMe has gone after and won.

Those customers have translated into earnings. AskMe, which was founded in 1999 and now has 45 employees, reported its first profit in the second quarter of this year and expects to make money in the third quarter as well.

The sales, which can top $1 million depending on the size of deployment, have come in hard times, no less, when companies aren't parting with money easily, especially for new-fangled software.

That's why Shekawat and his fellow founders -- Microsoft alumni Digvijay Chauhan and Ramesh Parameswaran -- decided to prove themselves with the big guys in a software category they helped invent called "employee knowledge networks.''

The database systems, which Shekawat likes to call "people networks,'' not only collect and index information on company practices, but also connect workers with questions to company experts who can answer them.

It's a way, Shekawat explained, to preserve and make use of valuable institutional memory that is typically lost today when an employee leaves or retires. For instance, instead of calling up a long-retired engineer -- as some companies do today to get critical background on a technical project -- AskMe's multipronged systems capture and store questions and answers at the time they're exchanged, allowing other employees to look up the material in a database.

If querying the database doesn't solve the problem, the system can then connect an employee to an identified set of company experts -- who, in the latest version of AskMe's software, actually get rated from 1 to 5 on how quick and useful their response is.

The answers, Shekawat said, can be critical to a salesman trying to close a deal at the end of a quarter. For engineers back at the office, he said, a high response rating in an AskMe system has become a mark of pride.

At consumer products giant Procter & Gamble, Shekawat said, "This is becoming a bit of a social status symbol among all these geeky engineers.''

For years, AskMe's founders -- all natives of India -- had kicked around a variety of business ideas with chums in Seattle and the Bay Area, where Shekawat worked for four years at MSI, a top-drawer technology consulting firm. At MSI, Shekawat worked on projects for Microsoft, Oracle, Hewlett-Packard and Sun Microsystems, getting an insider's view of where these industry giants saw technology heading.

"In 1999, when we got this idea, we said people-to-people (networking) is going to be very important,'' Shekawat said. "There were all kinds of leading indicators, whether you looked at (Web sites) like Napster or eBay-- which is a person-to-person auction marketplace, really -- or what kinds of problems corporations were trying to solve'' in terms of retaining information that is largely locked up in people's heads.

Last week, AskMe announced it will close the consumer Web site it started with -- Xpertsite.com -- but company officials point out it's not a change in strategy: The company has always used the site as a test bed for its software, which is marketed to large enterprises with at least 1,000 employees.

"Around 3,500 to 4,000 people is where things start breaking down and people have no idea who's doing what,'' Hossein Mousavi, AskMe's vice president of marketing, said of companies.

The sales strategy, Shekawat explained, has been to get a system up and running to prove it can work before getting a customer to sign a check.

AskMe's customers have typically started with a pilot project in a department, then bought more software to roll out to other departments or the whole company.

A phase-one roll-out for 750 to 1,000 people might cost between $75,000 and $150,000. After that, a typical sale runs $350,000 to $400,000 or more.

Skekawat did not reveal how much revenue or profit the company has made, but he and his crew are noted for their tight hold on expenses.

"They've got the cost structure squeezed down as far as it can go,'' said board member Bill Miller. Miller is a partner with Kirkland-based OVP Venture Partners, which has contributed to the $24 million in funding that AskMe has raised to date.

Among the few competitors AskMe has in the field, Tacit Knowledge Systems recently wrested away a contract. But that doesn't worry Miller, who says AskMe has a two-year lead on its competitors.

In addition, "This is a company that is as hard core as it comes,'' he added. "They're hard-scrabble entrepreneurs.''

Despite the poor economy, Miller said, "These guys are going to come out on the other end.''

Cydney Gillis can be reached at 425-453-4226 or cydney.gillis@eastsidejournal.com.