Never mind that when he resigned from First USA in 1999, the company had just pushed its parent, Bank One, into a $500 million shortfall. And never mind that he was followed out the door by James Stewart (above left), who had joined him in founding Bank One's troubled WingspanBank and is now second in command at Juniper. Vague and Stewart's previous successes at First USA established them as stars.
"They understand this business inside and out, and they're experts on the science of direct marketing," says Tom Smith of Total Technology Ventures, a Juniper investor.
Innovative marketing could prove crucial for Juniper. The company's betting on a direct-mail campaign to woo credit card customers, whom it hopes to convert to banking products. Stewart predicts that a hefty portion of customers will move quickly from plastic to checking accounts with bill-pay features. "Right away you get some cross-sell," he says, pointing out that at Wingspan, 10 to 20 percent of customers who were pitched a second product accepted it.
If the notion of converting credit card holders to online banking customers sounds familiar, it should, says Ken Posner of Morgan Stanley Dean Witter: It's already being pursued successfully by competitors - like MBNA and Capital One - who dwarf Juniper in size and experience.
But the one-two pitch is hard to do. "You have to be very good at suggesting the right product to the right consumer," says Posner. You also, hopes Juniper, have to have the right team calling the shots. / Deborah Asbrand
INTERNATIONAL EXCHANGE
Moola for Midas
Libertarians have long dreamed that the Web would free them from the constraints of government. But such freedom remains out of reach as long as national treasuries control the value of money. Fans of E-gold.com would like to change that.
Offering an online currency backed by gold, E-gold bills itself as "always as good as the gold it's backed with - this year, next year, a thousand years from now." About a third of E-gold's 90,000 account holders come from nations with wildly unstable currencies, says the site's founder, former radiation oncologist Douglas Jackson. Because gold's value is fixed, buyers and sellers in different countries can enjoy greater convenience with it, he says. "It's no harder to spend in Malaysia than in Hoboken."
But no easier, either. To obtain E-gold, customers must go through a gold seller and pay by credit card, check or wire transfer. Once the gold is credited to users' accounts, they can spend it at select merchants by the gram and centigram. But very few online stores accept E-gold. Among the handful listed on E-gold's site are a cigar merchant, a seller of handmade teddy bears and an English-Chinese translation service. In most cases, customers will need to change their money back into dollars, working through an intermediary like OmniPay, which charges $1 for the service.
There's also an annual 1 percent storage fee and a small charge on every E-gold payment. That doesn't faze users like Jeff Fitzmyers, a California Web designer who keeps a couple hundred dollars in an E-gold savings account for his goddaughter. Sure, he loses interest by keeping his cash in E-gold, but the loss is mitigated by the reduced risk of inflation, says Fitzmyers, who notes that he doesn't "like how the Feds have control over the money supply."
But who controls E-gold? Its founder doesn't know. Jackson owned the site but spun it off in 1999 to a company incorporated in the Caribbean. And the company's name? "It's simply not relevant for me to know that," says Jackson. Sounds a bit sketchy for a currency that's supposed to be more reliable than the dollar, but Jackson insists all E-gold is safe, even from the company that owns it, since the actual bullion is in a bank in Toronto and held by a trust in Bermuda.
