Quantum Metric CEO Mario Ciabarra wanted to become an entrepreneur since he was a kindergartner growing up in Philadelphia.
While the ventures have gotten larger, his goal has always remained the same: Give customers what they want, when the want it — or, put another way, help remove obstacles that prevent them from getting what they want. While trying to fulfill that goal, he has become one of the most successful entrepreneurs in the Colorado Springs area.
Last month, Ciabarra took a giant step in that journey: Quantum Metric landed $200 million in venture capital in a deal that values the company at more than $1 billion, making it the first technology "unicorn" (a company valued at more than $1 billion,) in Colorado Springs. The transaction also was the largest investment ever in a local startup.
Ciabarra got his start in business by buying candy in bulk at the grocery store and selling individual packages to classmates for a profit, following in the footsteps of his older brother, Chris, who had done the same. Doing so launched a lifelong effort to top each other with their latest venture, whether the scorecard was how much money they raised or what the company fetched when sold.
"I had a thirst for entrepreneurship and success. I knew that if I bought a 10-pack of candy for a dollar and sold each candy bar for 50 cents, I would make a good profit," Mario said. "Every venture became bigger, and the lesson is that there is demand and I can create supply. Any kid could have bought the 10-pack, but there is something about the convenience — people will pay for it. That has continued through life — finding needs that we could meet."
While in high school, Mario landed his first job in the industry that employs many teenagers — retail — by working in a clothing store and for the health and nutrition chain GNC. His job at GNC would give him an idea for his next step — selling dieting supplements by direct mail in a venture that would teach him a valuable lesson: Learn to stay grounded, or, in other words, don't overestimate the market for your product.
He formed a partnership with a GNC co-worker and they calculated they needed 1% of the people who received their mail offer to actually buy their American Dieting Association supplements. They spent several months on the project, but just 0.9% of their target customers actually bought the supplements, and the partners lost the entire $300 they had invested in the company — a tiny fraction of what Mario would invest in subsequent ventures.
"That was the difference between success and failure. If we got a 1.5% response, we would have been massively successful," Mario said. "You have to shoot for the stars to be successful, but you also have to think of what could happen if you don't make that 1%. It took two or three months for me to realize it wasn't going to work, and I didn't have the cash or passion to keep doing it."
Mario's college businesses were both much more successful — a T-shirt venture call Deez Teez that helped to pay for his bachelor's degree at Pennsylvania State University and a note-taking business that paid students to take notes from popular classes and made money from advertising. The note-taking business broke even but also taught him how to manage people and lead, which Ciabarra said was his first "real" experience as an entrepreneur.
While at Penn State, Mario received his degree in biochemistry and microbiology with an emphasis in computer science. That meant he wasn't "classically trained in computer science and I didn't fully embrace it, so I think about it differently. It has allowed me to take on projects that don't fit the computer science persona and solve problems in different ways.
"If you are at the intersection of various functions, that is where innovation happens. It has helped me in my (entrepreneurial) journey."
Chris would follow a similar path to entrepreneurship, financing his college education with a business that built and fixed websites. He would eventually start Revel Systems, an iPad-based point-of-sale system that eventually landed $125 million from private equity investors. He gave up control of the company in the deal — an experience Mario said taught him a lesson in how to structure investments in his companies. Chris recently secured a $5.5 million investment in his latest company, Athena Security, which uses artificial intelligence to analyze security camera images to report crimes in progress.
"We have always been competitive with each other our whole lives, in sports, school and business," Chris said of his brother. "He started a company and sold it for millions, then I started a company that sold out for millions more. He apparently needed to start another company because he can't have me selling my company for more. We will do another round of financing soon for Athena, but I don't need $200 million. He (Mario) is in a great niche with a great product and is doing a great job."
While in college, Mario completed internships with IBM, NCR and consulting giant Accenture. He learned the most at Accenture by working with senior executives and watching how they faced the daily challenges. That led to his first job as a technology management consultant at accounting giant PricewaterhouseCoopers in San Francisco, where he worked with AT&T to launch its 3G wireless network, including systems for billing, customer management and provisioning new service.
After nearly three years he moved to Virgin Mobile, which Mario credits with setting him up for success in the rest of his career by tasking him with leading a web team. He had a desk across from a member of the information technology operations team and could see coding errors on his co-worker's computer screen. The co-worker was unaware of the errors, showing Mario that poor communications between teams can hurt the product, the company and customers.
"If you don't tell the operations team what the errors mean, no one knows there is a problem and tries to fix it. It was a problem of the operations and the development team not working together," Mario said. Months later he began developing a product that inspired him to work with the operations team to solve problems, a product he would eventually build a company around.
By the time Mario started developing the product, he had moved onto Hewlett-Packard . He spent 11 months working at HP during the day and spending the rest of his time on DevStream, his first major startup, which he sold to Compuware for so much that he would never work for someone else again.
"It was very consuming and stressful, and when I looked back, it was stressful for no reason. I made it stressful. I learned I needed not to go through the ups and downs," Mario said. "Quantum is many times more successful but many times less stressful. Each of my next three startups were progressively less stressful because you read about the $200 million financing round and it is all about hearing yes. What you don't hear is the story of the hundreds of no's we got on the way to success. When you get those no's, it is not that you have a bad idea, that you're doing it wrong or are a bad person or leader. You just need another at bat."
Many startups fail, Mario said, because entrepreneurs stop trying and don't learn from their failures. He is thankful for "all the things that weren't necessarily good outcomes, because the failures led me to where I am today."
After selling DevStream, Mario spent the next six months traveling to 27 counties. He realized he couldn't retire at 26 but had the financial security to "do what I love and didn't need to work anymore." About that time Ciabarra became a father for the first time and was exhausted after the first two weeks of parenting. He set out to develop a baby monitor to keep track of pulse, oxygen level and temperature to give parents peace of mind so they could get some sleep.
He quickly discovered that developing computer hardware was much more difficult than software, but became distracted by his new mobile phone — the first edition of the iPhone. He quickly realized he wanted the iPhone to do things Apple hadn't included in its capabilities — become a Wi-Fi hotspot and include key notifications on the opening screen. He started Intelliborn to design and develops applications for the iPhone to offer those capabilities.
Apple would become a major obstacle to those plans — the company insisted that any applications be sold through its own app store. Instead, Mario became part of a movement to offer apps outside of Apple's store and enable the iPhone to use them, a process called jailbreaking. He later started Rocky Your Phone as an alternative to Apple's app store. He eventually sold it to a larger competitor.
"It was all about finding a need — I had a need and felt the pain of not being able to use my iPhone as a hot spot, so I created one and other successful apps," he said. "We sold more software than all of the other app developers in the alternative market. We made money in the first year, but we sold 50 times more on the marketing platform we developed to amplify our reach. We had 4 million users in our independent app store."
Eventually, Apple started developing its own free apps to replace those Intelliborn was selling, prompting Mario to wind down the company and begin working on Quantum. He created Quantum in 2015 to help companies find their best online revenue opportunities, using real-time customer feedback to more quickly build and improve digital products. He named the new company Quantum Metric because quantum is the smallest of things and metric is a form of measurement.
To learn how to build the company into a technology unicorn, Mario set out to find a mentor who could show him the path he needed to follow. He aimed high, seeking out longtime Cisco Chairman John Chambers by crashing a party he was hosting in Portugal. Chambers told Mario at the party to call him the next day, which led to quarterly, then monthly and now almost daily phone calls among friends.
"I never have been afraid to ask great leaders to be my mentor," Mario said. "I joined him last year on trip to Alaska, and every morning he would go to the kitchen and talk to the staff about their hopes, dreams and aspirations — that is amazing leadership. Everyone is equal in his eyes. I want to grow up to be like him."
The company started selling its software in 2016. It landed $1 million from Boston private equity giant Bain Capital Ventures in 2017 and another $25 million from Insight Partners a year later. Last year the company borrowed another $25 million from Silicon Valley Bank to finance its growth for a few months before getting another $200 million in January from Insight that will help the company keep up with the surging growth stemming from consumers turning to online purchases during the COVID-19 pandemic. The funding will help the company expand its staff from 225 to 400 by year's end.
Quantum Metric's 120 major customers include 3M, Alaska Airlines, Bass Pro Shops, FanDuel, Lenovo, Lululemon and Western Union. In one example, clothing manufacturer Carhartt uses Quantum Metric's software to identify and fix issues with its customer website, including a box in a form for post office boxes that could not be clicked, frustrating customers. Another customer, Canadian Tire, used Quantum Metric's software to find that up to 20% of its customers were trying to use expired coupons, prompting the company to allow those coupons so it could complete more online sales.
Lonne Jaffe, managing partner of Insight Partners, said his fund looks for investments that can double or triple sales annually. He believes Quantum Metric fits that mold. He said Insight backed Mario because he had a track record of previous successes and has a broad set of skills that span from writing code for the company's software to selling the company and its product to both customers and investors, and recruiting talent.
Quantum's product is attractive, Jaffe said, because "it bundles capabilities that, in the past, had been separate markets and integrates them into a single platform. It puts together a lot of data, does sophisticated analysis and gives the customer the top 20 things they could do to improve their website or app. It allows you to look at the (website or app) user's experience and see where they are having issues, and even large companies have those issues."
Jaffe said Quantum's biggest challenges will be continuing to attract top-level talent and expanding internationally, but he believes the company has "enormous" potential .
Mario wants to take the company public, so he is adding high-profile finance and sales executives, as well as bringing back a veteran of one of his previous startups, David Wang, as chief architect. Wang helped Mario come up with the idea for Quantum Metric and co-authoedr its software before moving to Oregon to work in the cybersecurity and intelligence industry.
"When I hired him the first time, I hired someone smarter than me and it was so enjoyable. I just had to get out of his way. He was so smart, I had to find something big to do," Mario said. "I found out how to harness enthusiasm and motivate another human being to achieve a common goal. That is the biggest challenge of any leader to unlock that."
Wang said he and Mario work well together because they have completely different personalities — Wang focuses on the technology, while Mario excels at building a top-level team. They will both face the same challenge in the next phase of Quantum Metric's growth — Wang must enable the company's software to handle billions of bits of data, while Ciabarra must find the talent to complete that task.
Before Quantum Metric, Mario had focused on building products, but he learned that the success of his new company depended on finding the right talent. As a result, he interviews every job candidate, looking for passion, persistence and integrity. That meant a lot of interviewing — Quantum grew from 40 employees to 175 between late 2018 and late 2020, and it has added another 50 in the past three months.
Mario's next goal is to build Quantum Metric into a "dragon, because dragons eat unicorns." He believes the company can grow to $20 billion to $50 billion in sales within three to five years and could employ 800 or more within two years. He doesn't plan on moving the company out of Colorado Springs; its heart is here, he says, and any success the company has will be "Colorado Springs' successes."