Connexor - A Successful Finnish Language Technology Start-Up

Introduction

Founding Fathers
Connexor was founded in 1997 by Atro Voutilainen, Timo J?rvinen and Pasi Tapanainen who had done scientific research together and had similar academic backgrounds. Based on long-term research, Pasi Tapanainen and Timo J?rvinen had invented a new, original and superior formalism called Functional Dependency Grammar (FDG).

The founders believed that their technology had high commercial potential in applications, tools and components to analyse and manage large and complex flows of information in corporate environments. Fourteen different product ideas were considered as showcases to demonstrate the applicability of FDG technology in a wide range of applications. The TrueStyler product was chosen to showcase the first example of the technology in use.

Competitive Advantage and Value-added
Connexor has practically a monopoly position in the high end area covered by the Machinese parser product family, which also now includes semantic analysis capabilities, because no other companies seem to offer such advanced technology for several languages and several OS/platforms.

NaviTerm's content analysis, also based on advanced FDG technology, includes lexical, morphological, and syntactic analysis as well as analysis of the position and distribution of words. It is important in intelligent applications such as automatic news analysis, indexing, summarisation, and information extraction. It can also be used in terminology management applications to extract lists of terms.

NaviTerm guarantees quality and consistency - when text is indexed manually, results can be unreliable as people index documents in different ways - and is available for Finnish and English. Other languages such as Swedish, French, Spanish and German will be available later.

Pricing varies according to the customer and the application. "If you integrate the software in a laptop computer or build it into a server - the server potentially covers millions of users and laptop computers are sold in millions, so pricing has to be done in accordance with usage. In practice it is the same software in both of them, but the revenue that comes from the server should match that which comes from the laptops", says Connexor's CEO Jan Magnusson.

NaviTerm's value also stems from its contribution to cost savings and productivity increases. Computer time is cheaper than people time, updates are cheap and the software can be made available on relatively small notebook configurations.

Business Strategy and Organisation
New CEO Jan Magnusson can take much of the credit for shifting Conexor's business strategy from labour-intensive one-off project work to a more lucrative focus on targeting system integrators, system houses, large corporate users and other IT solution and service providers, where developers can take advantage of Connexor's API (Application Programming Interface) to incorporate FDG components into their applications.

Having started up with the three founding partners and a few part-time students Connexor currently has a full-time staff of 16. This growth has allowed the company to organise its business more effectively around four distinct units: management, R&D, sales and marketing, and a support services team which is responsible for consultancy, support, testing and delivery services.

Potential Customers are Everywhere
Language technology has applications in many different areas. Conexor's customers currently include big corporations, universities, software houses, research institutions, telephone companies, web companies offering a range of online services, market research and intelligence agencies, and media and translation bureaux. Connexor's software has also been used in the preparation of documentation and support material for telephone exchanges and elevators. The latest implementation is in embedded environments like the Nokia Communicator.

"The software must fit into thousands and thousands of environments. Customers must be found everywhere - and we are finding them", says Jan Magnusson. "Maybe in the future our technology can be used in voice-controlled refrigerators", he guesses. Online indexing and categorisation of large, complex and continuous flows of information are the main application areas for NaviTerm. Such techniques are fundamental to finding and exploiting information where the success or failure of a company can depend on the ability to find the right information at the right time.

Important facts are often hidden in large quantities of information that are increasingly becoming available, especially where the internet has created a new world-wide market for information. Managing information overload is a major issue and the time is ripe for systems and services with the capability to effectively retrieve and filter information, and to deliver it exploiting new channels such as the internet or mobile application platforms.

The Future
In 1997-1999 Connexor was funded with the help of one long-term private financier, but it has been self-supporting since 2000. Turnover has doubled in a short period and prospects look very good. The current focus is on finding new partners and creating new sales and marketing channels. "There is going to be strong demand for our kind of software", says Jan Magnusson.

"The aim is not to grow without boundaries, but in a controlled way". Jan's advice to people who are starting up: "Good scientific work and research are not enough to make a great business success. The success story for a technology oriented start-up company is typically based on four things: a good idea, lots of knowledge, entrepreneurship and courage. It worked for companies like Hewlett Packard and Microsoft - let's hope it works for us too."

This success story is based on interviews with Jan Magnusson President, CEO, Professional Service Manager Timo Lahtinen and Product Manager Tarmo Pellikka at Connexor. We would like to thank them very much for their help and co-operation. A full text version of it is also available in MS Word [34K] or PDF [22K] formats.