January 24, 2000

The May Report

by Ron May

312-670-6336 Phone

ron@themayreport.com (preferrably for subscribe and unsubscribe) or
ronaldmay@aol.com

The May Report: 1/24/2000: Weinstein leaves; BlueMeteor CEO; Kathy Gale steps
in

This is a news flash. I found out about this over the weekend since David was
trying to reach me several times. On Saturday, I was at his alma mater,
Kellogg, soaking up the Digital Frontier Conference.

Crain’s got wind of David’s departure late last week. He got an offer two
weeks ago from BlueMeteor and he told the Mayor early last week of his plans
to leave, but word leaked out and Greg Hinz of Crain’s called, but when he
talked to the press office, they got the name of the firm that David is going
to WRONG. Crain’s, you are emulating The May Report here. You have to check
facts BEFORE printing them.

Isn’t it fun to tease people who have no sense of humor?

Anyway, David, knowing that the story was out, called me Saturday afternoon
and then tried again on Sunday. I got an e-mail from his as well and we just
talked.

This report is basically in the form of notes I took in our conversation
since it will take me too long to rewrite it formally.

Here are my notes:

David is leaving on February 15th. The company is BlueMeteor, Inc., not
Blue-Moon as Crain’s incorrectly reported. David is also 30 now, not 29 as
Crain’s reported.

BlueMeteor is in a very hot space. They are a a net accelerator and
e-commerce accelerator built around an outsourcing and ASP business model.
Crain’s says they are an operations firm, and David says that is not right.

They are about 50 people right now, 44 of whom are consultants
(approximately).

The COO is Patrick O’Brien who David describes as “a bulldog,” and the CTO is
Craig Mohan, “known for being a technology stud,” David says. Rick Knoll is
the Chief Financial Officer.

How it happened: two people came to David and asked him to run their firms.
He wasn’t sure if they were the right firms. One was a portal and the other a
service dotcom. David went to Bob Bernard for advice because he knew him and
respected him. Viewed his advice as invaluable.

“Bob drives black ink below the line. Getting the mentoring of a tech
superstar is important for my career,” David says.

Bob came back to David and offered him the job about two weeks ago.

BlueMeteor has personal money from Bob Bernard, but the amount of the
investment is not known (by me).

Both Pat and Craig are former Whittman-Hart employees.

“What about the propriety of this?,” I asked. “After all, the City gave a
$24MM TIF to Whittman-Hart. Will it appear to be mutual back-scratching?,” I
said.

David’s response:

“BlueMeteor is a completely separate company from W-H that is housed in a new
building at 440 W. Ontario that will house Bob’s new VC firm.” (I don’t know
if this is known yet. Could be another May Report scoop?)

“These are personal investments of Bob Bernard,” he said.

BlueMeteor has a partnership with W-H in servicing clients. David will spell
this out in more detail when we have more time. They do something that W-H
does not do, and vice versa.

“The W-H TIF has no bearing on this,” David says. “When they did the
investment, W-H was talking about going to the suburbs or another city,”
David insists. “Yes, I was involved and advised the DPD,” but the two things
are completely unrelated, he stresses. Also, he added that this TIF turns
out, by virtue of the US Web merger, to be “the smartest technology thing the
City ever did. If we had known about this at the time, we would have run to
keep them here,” he said.

“Any of the TIF stuff gets approved by the Department of Planning and
Development, and the Mayor’s Office functions as a facilitator and it was
part of the agenda,” David says.

David added that he was concerned about the appearance of propriety with
regard to what position he might take in light of his role in the City
government and that is one reason he did not consider going to divine
interVentures which is managing the City’s Big Shoulders Fund.

The Mayor was wonderful when David gave his notice, and said “one of the
greatest contributions a person can make to the City is to be an
entrepreneur.”

There is a big round of VC in the works with BlueMeteor. Not signed yet.
David will give the story in the next week.

David views himself as a part of the tech entrepreneur community. Has been at
the City for four years. He has a tech background. Worked for a software co.
at age 21. At Gen. Services he was head of MIS, managed $10MM tech budget
(out of a $127MM operating budget) at 25 to 27. Put the first major
application to sell City’s vacant land over the internet, BEFORE it was
fashionable to use the net.

He has always been preparing to go back to the private sector.

He was one of the first majors in Tech and E-Commerce at Kellogg.

Strength of the community has been an inspiration for him to do this.

Leaving with strong team in place. There is a tech unit in DPD.

Person coming on board, Katherine Gale, who has been the number two person at
the schools. She co-authored the blueprint of technology action plan. She
will be the person replacing David in the Mayor’s Office and there will be a
full team. Yes, I did yell at him to give this to me. TMR gets scoops.

Four people in DPD with Meredith O’Connor who is co-director of the tech unit
and Jimm (this is how his name is spelled, not a typo for all you sticklers
out there) Dispensa who is also a co-director.

Dave’s partner since the inception of the tech strategy program has been Mike
Jasso, who has been the driving force behind the tech initiative. Jasso heads
the Chicago Partnership for Econ. Development. This is bigger than one person
now.
_____________
Another May Report scoop. Gooitech will be closing its doors by Feb. 1. This
comes from employees who work there and it has been announced internally this
morning. You can’t beat TMR for timely and ACCURATE info.

Look, this whole thing is starting to go to my head. Red Herring,
TheStreet.com, two articles in the Sun-Times, starting to make money, new
threads, looking good, feeling good. What’s next?

If there is not enough room in the same room for Flip’s ego and mine, it will
be his that causes the cramped space. He did get some outright jabs from the
panelists at the DFC this weekend. More on that later.