Ori Allon, who sold his previous two startups to Google (s goog) and Twitter, is stepping out of his comfort zone with his mysterious new venture called Urban Compass. Instead of relying wholly on algorithms, he’s building a human-powered, hyper-local startup that uses algorithms to mobilize a team of people on the ground. He’s taking on a partner for the first time and he just raised a huge seed round of $8 million.
Allon isn’t saying what exactly New York City-based Urban Compass is trying to tackle. That will come around March when he starts rolling out Urban Compass in New York. The website says only that Urban Compass is trying to help people, “make their most important personal decisions.”
But there’s a number of reasons to keep track of what Allon is doing based on his track record, investors and his partner, Goldman Sachs banker Robert Reffkin. And I have a few thoughts on what Allon might be trying to tackle, which I’ll explain later.
Selling to Google and Twitter
First, a little background on Allon and Reffkin. Allon sold his Orion Search Engine to Google in 2006 after starting the project as a PhD student at the University of New South Wales in Sydney. Orion managed to return results on pages that didn’t necessarily relate to a searched keyword, something Google has integrated into its search engine. Allon then launched Julpan, a Microsoft-backed (s msft) startup that parsed online social activity and surfaced fresh and relevant content to users. After Twitter bought Julpan last year, Allon became the head of Twitter’s New York engineering office and Julpan became the basis for Twitter’s discovery engine.
Six months ago, Allon got together with his friend Robert Reffkin, a banker with Goldman Sachs. The two had met years earlier at a conference when Reffkin was a fellow at the White House. The pair decided to start their own company, combining Allon’s engineering skill with Reffkin’s ability to mobilize people.
In addition to working at Goldman, Reffkin founded the Bronx Success Academy, an elementary charter school in 2006 and also established New York Needs You, a non-profit that provides mentoring to first-generation college students. While a couple stories on Urban Compass have focused on Allon’s credentials, it’s actually Reffkin’s background that might be more telling about the company’s ambitions.
Allon said the company will be a mix of hardcore engineers in the office but Urban Compass workers on the ground who form a human network. Unlike his previous projects, Allon said the problem he’s tackling can’t be handled through technology alone. It’s something that requires individual workers, who can be called upon instantly, much like taxi drivers. Allon compared Urban Compass to transportation startup Uber, but said his venture will be even more complex.
“Mobilizing people is a big part of it. There are certain people that are needed at certain times. We can make it more efficient and optimize the process,” he said.
He said if all goes well, Urban Compass will be tackling a huge market that hasn’t had much innovation. He believes it could be something that could be worth billions some day. It will initially target big cities but could spread to the entire country at some point. The idea, along with Allon’s resume, has captured the imagination of some big name investors. Goldman Sachs is making its first seed investment in Urban Compass and is joining Founders Fund and Thrive Capital, Ken Chenault, the CEO of American Express (s axp) and ZocDoc’s CEO Cyrus Massoumi.
Possible education play?
So what exactly is Allon and Reffkin building? My best guess is it’s an education-related startup that provides on demand tutoring or mentoring services. That’s based on Reffkin’s work with Bronx Success Academy and New York Needs You. Reffkin is actually listed as the CEO of Urban Compass and he told me briefly that the company will benefit younger users first.
“In founding a charter school and a non-profit my passion was to build things for New York,” said Reffkin. “Six months ago, we got together to put (Allon’s) engineering talents and my strategy talents together. Our criteria is: what would help a lot of people in New York City and something we could build together. The reason why this is exciting is I believe this will improve the lives of a tremendous number of New Yorkers, particularly younger people.”
Another co-founder for Urban Compass, according to LinkedIn, is Michael Weiss, a former product and strategy guy at Airbnb who previously was a founding member of non-profit Pencils for Promise, which builds schools in the developing world.
If Urban Compass does go after the education market, it’ll have some competition. Companies like InstaEdu and TutorSpree provide a mix of tutoring and mentoring services.
Hyper-local down to the street level
I’ll be curious to see what spin Allon can add to this idea. He said he was interested in making this a very local service, and he cited some of the innovation that went into Google Street View as one of his inspirations. He said hyper local to him means being everywhere, down to the “apartment level, restaurant level and street level.” Allon said the majority of Urban Compass’ workers will be full-time on the street workers rather than engineers in the office. He said the company’s product will not be mobile first but will be accessed on all kinds of devices though mobile devices will factor heavily in mobilizing Urban Compass’ employees.
I may be completely off and Urban Compass may turn out to be something other than an education startup or tutoring provider. It could be something broader involving child care. Or it could be a local decision engine, helping people find services and information nearby. That would fit more with the company’s website, which offers visitors these words: “Search. Explore. Decide.”
I’ll be still be interested to see what Allon and Reffkin can come up with. This is a huge amount of seed money for a new startup and with Allon’s track record, there’s a good bet he’s got more good ideas up his sleeve. Also, there are a lot of growing opportunities in local and location-based services, from crowd-sourced employment apps and markets like Gigwalk and Zaarly to more traditional local search and recommendation services like Yelp (s yelp), Google and Foursquare. We’re still early in the process of bridging the offline and online worlds, something Urban Compass sounds like it could help address.