Our CEO's Journey
Lee Lorenzen is a serial entrepreneur who sold his first software company while still in college and then went on to work at Xerox and Digital Research on some of the first graphical user interfaces for personal computers. For over 40 years, Lee has founded and/or funded 30+ startups with significant, high-ROI, liquidity events including:
- Sales Tracking System -- sold to Haggar
- Ventura Publisher -- sold to Xerox
- Fractal Design Painter -- sold in IPO
- Mac2Win -- sold to SHOP.com
- PGSoft -- sold to Novell
- Adonomics -- sold to Adknowledge
- SHOP.COM -- sold to Market America
- WorldShop/ShopO -- seed funded by UPS
- TapCloud – co-funded by Lorenzen
- LowPayer -- co-founded by Lorenzen
Unlike Lee, most people have no expertise in spotting the "crazy ones" who waste their time "sitting around inventing." These critics lack the proper lenses through which to see the future potential of the early versions of the visionaries' inventions. For these reasons, they are surprised when subsequent versions of these products with true paradigm-shifting powers are released into the world and cause what had been tiny ripples of change to swell into wealth-creating tsunamis that can exceed $100 billion.
Inventing the Multi-Vendor, Virtual Inventory, One-Cart Shopping System
Lee is known for founding companies based on his predictions about the ability of new technologies and/or business models to change the world.
One example of this is evidenced by his invention in 1997 of the multi-vendor, virtual inventory, one-cart shopping system (US 7,197,475). This invention enables 3rd party marketplace experiences such as the one that now powers over 50% of Amazon's GMV and was the reason why Bill Gates (Forbes #1) was a seed round investor in SHOP.COM in 1997 and Jeff Bezos (Forbes #2) invested 837,520 shares of Amazon stock for 10% of SHOP.COM in 2001.
While Lee has a number of inventions to his credit, he is still looking for someone who has invented a time machine because he needs it to go back to the morning of Sep. 30, 2001 and tell his former self to hold onto these Amazon shares, or at least margin them instead of selling them later that day, because they now have a value of $2.01BILLION. Sigh…
Creating the Lone Star Graphical User Interface System
Prior to his work at SHOP.COM, Lee created the Lone Star graphical user interface on a PC platform while at Xerox in 1982. This proof-of-concept pre-dated Apple's Macintosh and Microsoft's Windows by more than 2 years. When Xerox chose not to develop the Lone Star user interface into a product, Lee joined Digital Research (DRI) in 1983 and went on to create the GEM OS and GEM Desktop in 1984 which proved to the world the viability of Xerox's pioneering user interface work on the IBM PC platform.
Interestingly, Steve Jobs was so worried about Xerox's user interface being deployed on a PC platform that he personally threatened Bill Gates regarding Windows being too "Mac-like." Bill responded by suggesting that Steve first threaten to sue DRI because Lorenzen's GEM Desktop was closer to the Mac user interface than Windows was. Steve did so and DRI's inability to fight Apple's lawyers led to Lorenzen leaving DRI to start a desktop publishing company called Ventura Software. Both Apple and Microsoft subsequently went on to build graphical user interface businesses on the PC and Mac platforms that each exceeded $100 billion in market value.
Developing the Ventura Publisher Long Document Publishing System
At Ventura Software, Lorenzen was the software architect and primary developer of the bulk of Ventura Publisher on the GEM and Windows platforms creating such major desktop publishing innovations as advanced style sheets, fast H&J, multi-frame text flowing, database publishing hooks and editable tables. This period from 1986 to 1990 was during the early days of the desktop publishing industry (i.e., another industry that Lee helped pioneer) which grew to over $100 billion in market value and included companies such as Adobe, Aldus, Apple, Microsoft, FrameMaker, Xerox, Seybold and Quark. Lorenzen was recognized along with selected leaders of these companies as Desktop Publishing Pioneers by the Computer History Museum in 2017
During its entire history, Ventura Software had only 5 employees and Bill Gates was so impressed by Lee's "lean and mean software company" that he sent the following letter to make that point and to request Lee's support of Microsoft in the future -- which is why Lee approached Bill when he wanted a seed round investor for SHOP.COM.
Lee really appreciated the above note from Bill and Bill has been true to his word by not only investing in Lee’s subsequent ventures such as SHOP.COM but also providing a personal reference for Lee as part of a due diligence request by a Silicon Valley VC.
Predicting Facebook’s $100 Billion Valuation
More recently, Lorenzen accurately predicted that Facebook would be worth $100 billion at the time of their IPO. This prediction was made in writing and on video in 2007 and came true five years later just a few days after Facebook's IPO in 2012. Below is the chart from Scott Austin's WSJ article on May 18, 2012 along with a picture of Lee speaking at the first Developer Meeting for the Facebook Platform
The reasons for Lee’s prediction were outlined in detail in an interview with Rodney Rumford at the First Facebook Developers Summit in Palo Alto.
It was at this event that Lee first met Mark Zuckerberg and where the picture above was taken with a one callout showing Lee explaining why he was so confident about Facebook’s future valuation and with another callout showing what Lee imagines Mark’s thoughts might have been at the time.
Defending the $100 Billion Facebook Prediction
As you can see in this video of Lorenzen's $100 billion prediction at the Graphing Social Patterns conference, Lorenzen had to defend his views while being called "drunk" and "delusional" and "on crack" and a "security threat" by fellow panelists that included Michael Arrington, Jason Calacanis, and Robert Scoble:
"Back on October 11, 2007, I wrote that Lee Lorenzen was nuts. [...] I told Zuckerberg to sell at a $15 billion valuation. [...] But, Zuckerberg and Lorenzen had real vision and I didn’t."Robert Scoble
Spotting a Super-saturated Solution and Designing the Right Seed Crystal
The most recent example of this OS Lens approach being used by Lorenzen is in his prediction of something he calls the Influence Operating System (Influence OS) and the "Killer App" for it which he believes will be the ShopO Circles cross-border e-commerce app. The Phase 1 version of an Influence OS and App occurred during the Arab Spring in what Lorenzen called the Rock Candy Revolution when a Facebook Page was used to crystallize consensus, coordinate collaborations and change the world.
Like Wael Ghonim's one-off example of an Influence App built on top of a single Facebook page that rallied millions of Egyptians to take their country back in just 18 days, Lorenzen wants to build a multi-use, Influence OS on top of Facebook's Social Graph that numerous app developers can use to efficiently influence a large number of people for good purposes.
Building on Top of Facebook’s Social Graph
Facebook’s Social Graph currently contains information on 2.0 billion people around the globe who are the nodes in the graph and on their combined 300+ billion friend connections which are shown as white lines in the picture below:
Facebook’s market cap is over $500 billion and these revenues are derived almost exclusively from “advertising campaigns” which are delivered in the form of newsfeed posts and other messages that Facebook’s users see as they are using the app to find out what is going on in the world and in their friends’ lives.
Ever since Facebook connected its first 1 billion members into the Social Graph, the big question for smart entrepreneurs, investors and world changers has been:
“Now that Facebook exists at scale, what can we do that we couldn’t do before?”
Lorenzen’s answer to the above question was to create ShopO which solves the problem that while Facebook has provided easy access to information, not everyone has easy or equal access to the products they see others discussing on Facebook. The ShopO Circles app gives consumers everywhere a low-cost solution for acquiring products outside their country. In addition to solving a consumer problem, ShopO solves a problem for merchants and opens up a new opportunity for revenue for Facebook.
Without the ability to buy and ship products across borders, Facebook’s top advertisers in the US don’t spend advertising dollars to reach non-US residents. In fact, the successful introduction of a “global influence graph” on top of Facebook Social Graph would mean billions of new ad revenue to Facebook because these additional 1.8+ billion users outside the US would become attractive prospects as they could now cost-effectively find, pay for and ship these US products to their homes around the world.
Inventing the Group Delivery System Methods Used by ShopO Circles
On November 11, 2011, Lorenzen originated the idea of combining Facebook’s Social Graph with UPS’ Logistics Graph and this led to a highly successful consulting engagement with UPS. The goal of this engagement was to grow the install base of the UPS MyChoice delivery-redirection service by leveraging Facebook and the various viral growth techniques that such social networks makes possible. As part of this process, Lorenzen conceived of the concept of a Group Delivery System in which packages would be delivered to group leaders who had formed their groups using their Facebook friend connections and who handled the shopping, ordering and delivering of their group members’ packages.
The result of Lorenzen’s innovation was UPS’ receipt of the patent for Group Delivery Systems and Related Methods (US 20140279667 A1) as shown here:
This Group Delivery Systems and Related Methods patent is one of the reasons why WorldShop and UPS entered into a long term Strategic Alliance Agreement in December 2014 and why UPS made their seed round investment of $2.2 million in WorldShop LLC at that time.
Time will tell but Lorenzen believes that the cross-border, personal shopper business model based on groups of buyers gathered via social media will ultimately create one of more companies with over $100 billion in market value.
In case you haven't been counting, that makes 5 new software industries and/or companies with market values over $100 billion for which Lee Lorenzen has either been a pioneer, an early predictor of massive value or a provider of enabling technologies or business models. With that track record in mind, and for all the reasons stated earlier, you can count on his prediction that ShopO will be the next $100 billion company.
With that being said, if you intend to make financial investments based on any of the opinions expressed here, please remember:
Lorenzen's First Law of Fundraising: "Invest only what you can afford to lose completely and if such a loss occurs, still remain friends with Lee." 😄