Five years ago today, Chittu Nagarajan and I took a leap and launched Modria.
At that time we were just a single cube in a shared workspace in Cupertino. We were funded out of our own pockets. But we had big dreams. Chittu and I had both worked for years in the Online Dispute Resolution (ODR) field, and we shared the vision of resolving the world’s disputes through technology. We had been close colleagues at PayPal for several years, designing the PayPal Resolution Center and the Community Court, and we knew there were a huge number of disputes outside of the “walled garden” at eBay/PayPal. If we were really going to help to resolve the world’s disputes we knew we needed to start our own venture.
So on April 1, 2011 we filed for incorporation by filling out an online form (only $99 – what a bargain!) We were able to get the domain name “modria” for .com, .net, and .org, all for $7 apiece (the advice at the time was, any domain name that was less than seven letters, pronounceable, and meaningless in all major global languages was a winner.) We knew we wanted “ODR” in the name somewhere because ODR was the acronym of online dispute resolution, which was the heart and soul of what we did… so it came down to “codria” and “modria.” After some discussion, we decided on Modria, which sounded to us like a mythical destination where people could go to resolve their problems.
Our initial vision for Modria was as a dispute resolution service provider. We set up a website, ADRMarketplace.com, to sign up mediators and arbitrators. We thought we’d offer online skills training for mediators and provide our panelists as a service to companies that needed their disputes resolved. But it quickly became clear to us that there were already many good ADR organizations around the world with top quality panels of dispute resolvers. The real gap was in technology. While there were several ODR platforms already available, none of them had been built by veteran software and user experience designers, and they were all suffering from a lack of financial backing. We decided that if we were going to lead the charge on ODR, we needed to build technology that met the highest standards in Silicon Valley and then partner with existing ADR organizations to drive adoption.
It took us a while to find that first volume of disputes where we could get some traction and show that our approaches could scale. Initially we spent a bunch of time trying to build a resolution system for feedback disputes (e.g. disagreements on sites like Yelp and TripAdvisor). Our first shot was a service called ReviewRef (you can still find it on Facebook) that would evaluate reputation entries to see if they were falsely negative (like a business besmirching the reputation of a competitor) or false positive (like a business paying someone who had not truly been a customer to leave a positive review). In an attempt to further hone our value proposition, we narrowed our focus to professional review sites (like vitals.com, avvo.com, and realself.com) because doctors and lawyers are often prohibited by their ethical standards from responding to false feedback. We learned a lot, but we just couldn’t find a top site willing to let us play the role of trusted arbiter.
Around that time we had our first success in raising investment. This was our “angel” round, based more on the expertise of our team and promise in our target market than on actual traction. Esther Dyson, the legendary tech entrepreneur and investor, was one of the first to commit, which was huge. Esther’s investment got us in with Mitch Kapor, who also saw the promise and decided to participate. They both understood that the number of disputes generated over the Internet was going to grow, and that eventually all disputes (online or offline) would be resolved via technology. Their participation opened the door to some great institutional venture capitalists, like Battery Ventures and ATV. We also received investment from luminaries in the ODR field, like Ethan Katsh and Dan Rainey. The confidence and credibility of these early investors was an important validation point for us, and the perception that we were backed by “smart money” really helped us build our reputation in the early days.
As if by chance, one morning I had coffee with a friend who knew a lot about property taxes, and he urged me to look into tax appeals. After some introductions we found our way to Gary Townsend, who had been Deputy Assessor in Los Angeles County for more than two decades. Gary knew everybody, and he began to introduce us around in the Assessor community. We presented at the IAAO (International Association of Assessment Officers) conference and the CAMA/GIS (Computer Assisted Mass Appraisals and Geographic Information Systems) conferences. Eventually we deployed our first Resolution Center for Property Tax Assessment Appeals in Alachua County, Florida (the county around Gainesville.) Soon after we launched Resolution Centers in Nashville, TN (Davidson County), New Orleans, LA (Orleans Parrish), and Vancouver, BC (the Property Appeals Assessment Board). Over the next eighteen months we launched in other locations, like Atlanta, GA (Fulton County) and Durham, NC, as well as a statewide system for the Ohio Board of Tax Appeals.
That was when Modria really started to accelerate. Chittu opened a larger office in Chennai and we started hiring more developers. One of Modria’s closest Advisors, Rob Chesnut (currently GC at Chegg, but also the first SVP of Trust and Safety at eBay) introduced me to Scott Carr, an experienced CEO for cloud-based enterprise software companies. It was clear Scott’s wisdom would really take Modria to the next level, and after six months of close collaboration, Scott joined as CEO in June 2013 when we raised our A round from Foundry Ventures. We partnered with the American Arbitration Association to build a Resolution Center to support the New York No Fault insurance caseload, resolving disputes between insurers and medical service providers. The AAA NYNF platform was our biggest launch yet, and it immediately became our largest case load.
At the end of 2013, we had completely re-built the code we had licensed from PayPal when we launched Modria, which meant we could exit the license we had in place with eBay. That enabled us to turn our focus to eCommerce and payments, taking us back to our roots in marketplaces. eCommerce (including payment providers, marketplaces, and merchants) is the fastest growing segment of cases online, projected to reach 1b disputes per year within the next 12 months. We’re ready, because our platform Modria 2016 is completely redesigned and re-architected, in line with the latest best practices in cloud-based enterprise software design. We are active on five continents, and demand for our services regularly exceeds supply. We handle disputes around insurance, divorce, government, ecommerce, payments and more. And it’s showing no signs of slowing down.
The thing I’ve learned about running a start-up is that you never know what the future holds. New opportunities can appear on a moment’s notice, and you have to always be paying attention in order to make sure you don’t miss them. I never would have known that Assessors offices would be a good target for us had I not had coffee with my friend that fateful day. I’ve also learned never to become complacent. Enjoy the success of today but don’t let the afterglow last too long for fear of losing focus and missing those opportunities. But with all that said, it is nice on occasion to stop for a moment, look over your shoulder, and marvel at how far you’ve come. It is amazing to me to think what we’ve achieved in the last five years, but I’m even more excited about where we’re going in the next five. The time has truly come for ODR to enter the mainstream, and Modria is leading the charge.
Tune in on April 1st, 2021 for my ten-year look back. I can’t wait – I’m sure it’s going to be incredible.