Philadelphia Business Journal | Peter Key | September 21, 2012
WAYNE — When executives sit around a table talking about strategy, they often cite business data to support their views.
Suppose, however, that, rather than being a passive player, the data could join in the conversation, telling the executives how it should be analyzed and what moves they should consider making in response to the analysis.
That’s the idea behind Neuron, which ColdLight Solutions LLC calls Prescriptive Intelligence software.
“The idea is to let business people have the power of the voice of data in their decision-making,”
said Ryan Caplan, ColdLight’s founder and CEO.
Neuron combines the ability to process huge amounts of data with machine learning that enables it to spot patterns in the data that can be turned into action.
For example, Caplan said, a health-care system might want to know which of the people who have recently been discharged from its hospitals are the most likely to be readmitted soon.
Neuron can give each person a score based on the procedures they recently received, their age and medical history. But it also can list the reasons why it gives certain people a good chance of being readmitted soon, which can allow the health-care system to take steps to help the people reduce their risk of being readmitted.
“You can take that and say, ‘Maybe we should treat those people differently,’” Caplan said.
Although ColdLight is only 4 years old, it has some pretty big customers. British pharmaceutical giant AstraZeneca plc, Philadelphia-based Comcast Corp. and McLean, Va.-based Capital One Financial Corp.’s ING Direct are Neuron users.
That has helped the company make the Business Journal’s list of the area’s 100 fastest-growing companies three years running, with revenue of nearly $2 million last year, up from $1.2 million in 2010 and $399,000 in 2009.
It has the potential to grow much larger. Stamford, Conn.-based Gartner Inc. put the worldwide market for business-intelligence, analytics and performance-management software at $12.2 billion last year, up 16.3 percent from 2010.
Neuron’s mammoth processing capacity also puts it in another growth market, namely the one for products and services designed to deal with so-called big data. Those products and services include the hardware and software to store, process and analyze data, and companies that offer them are springing up all the time.
“There are quite a few companies that specialize in different parts of the big data process,” said Paul Pavlou, a professor of information systems, marketing and strategic management at Temple University’s Fox School of Business.
Fox’s Institute for Business and Information Technology is holding a conference on big data next Thursday at which ColdLight will be a presenter. The conference will focus on the potential for using big data to help businesses improve their operations, with specific presentations ranging from how insurers can use it to reduce fraud to how retailers can use it to improve their sales.
“Many companies are interested [in big data],” Pavlou said, “some of them just because they have done some small projects [involving big data] and they saw some business value created.”
Caplan’s path to becoming a would-be big-data mogul is somewhat convoluted.
Growing up in Baltimore, he liked fooling around with computers, but when it was time to go to college, he opted for the liberal-arts route, earning a bachelor’s degree in English with a minor in economics from the University of Delaware in 1995.
He quickly returned to the information-technology world, however, accepting a job with banking software developer Sanchez Computer Associates Inc. as a technical writer.
“My first day commuting from Newark, [Del.] to Paoli, I said, ‘I’m never doing that again,’” Caplan recalled. “I did it for eight years.”
During that time, Caplan went from writing documentation for Sanchez’s software to running the teams that were developing the company’s Internet banking software. Along the way, he took some computer-science courses at the Great Valley campus of Pennsylvania State University.
“I wanted to understand what I was writing about,” he said.
While Caplan was at Sanchez, the company grew dramatically, eventually being acquired by an even bigger company, Fidelity National Information Services Inc. of Jacksonville, Fla.
The resulting change in culture, plus the fact that he was getting bored just focusing on financial services, led Caplan to accept a job with Electronic Ink.
The Center City firm specializes in designing information displays, ranging from the screens employees see when using their company’s software to the large displays used by people charged with monitoring a power grid. Working for it gave Caplan, who wound up as its chief operating officer, a new perspective on software. He realized it wasn’t enough for software to provide people with information, it had to enable them to see it in such a way that they could use it.
Caplan got another new perspective from “Moneyball: The Art of Winning an Unfair Game,” a best seller by Michael Lewis that was made into a movie starring Brad Pitt. The book details how Billy Beane, as general manager of the Oakland Athletics, used statistics to devise a different way of assessing baseball players’ performance that allowed him to assemble a competitive baseball team despite having less money to spend than other franchises.
“I thought, ‘Couldn’t the same thing be applied to business?’” Caplan said.
In 2008, Caplan founded ColdLight to find out. The company initially used tools developed by others to provide consulting services, but wasn’t happy with those and decided to create its own software, which turned out to be Neuron.
Neuron uses machine-learning technology developed by Bruce Katz, ColdLight’s chief scientist, who is a specialist in artificial intelligence.
The machine learning enables Neuron to spot patterns in data and assess their validity in determining behavior. If Neuron makes a recommendation that doesn’t work, Caplan said, the software takes that into account in making future recommendations.
ColdLight mostly delivers Neuron as a service, although customers can buy appliances to host it on their premises.
Other than a friends-and-family round and an investment from Ben Frankin Technology Partners of Southeastern Pennsylvania, the state-funded economic-development nonprofit based at The Navy Yard, ColdLight hasn’t taken any outside money.
That means Caplan doesn’t have to spend much time thinking about an exit for the firm — and he hasn’t.
“If we continue to provide something that’s highly valuable,” he said, “the rest will take care of itself.”