As an interactive agency, we have taken advantage of all the venture capital money that poured into marketing technology/communications companies in the mid- to late-'90s. Thanks to VCs with a bit of the "irrational exuberance" bug, we are now able to license ad serving technology, Web analytics software and e-mail marketing technology at pennies on the proverbial dollar.
However, what has amazed and encouraged me are the incredible stories of companies that have grown "organically" (without venture-funding) in the last couple of years. Below are examples of two such companies -- e-mail marketing providers successfully navigating their way through an increasingly competitive space, quite often surpassing well-funded competitors when it comes to product innovation. These companies, and others like them, deserve kudos for hunkering down and building a company the old fashioned way. Read below to learn how they achieved their success to date.
The CoolerEmail Story
Co-founded by Lars Helgeson and Leif Youngberg, CoolerEmail started as a Web site developer for midsize companies. The company gradually evolved by addressing concerns that clients had with their database management system. Helgeson and Youngberg realized the key to the success of any Internet marketing involves effective use of communication and contact management. This resulted in the genesis of their e-mail list management and integrated marketing and sales solution. As their business grew, customers' needs in these areas became the basis for upgrades and product improvements.
Today, product development and marketing intelligence rests almost entirely on customer feedback. Helgeson and Youngberg say their customers are their most valuable asset.
How do they incorporate the feedback into the product development loop? Below are some examples:
Many customers requested an easy way to access a Web site to store images and files, so CoolerEmail created a Document Library to help them.
A discussion on how to partner with Act led to Cooler's eventual XML API so that other developers could "plug in" to CoolerEmail.
One of their interactive agency partners suggested the CoolerTracks concept -- helping them to track click-stream activity (without having to merge e-mail campaign results with Web logs).
Multiple customers have suggested development of Dynamic Content, for rules-based mail merging, one of the most recent features in CoolerEmail
The Pexicom Story
Pexicom was started by Brad Lewis and Doug Fields. In the beginning, they had no formal business plan, no outside funding and no office. They started by acquiring the rights to a technology that Fields had developed for a previous startup. The technology was a unified messaging portal enabling users to send and receive pages, e-mail, faxes and voice mail in one Web-based interface.
Lewis and Fields researched how to best leverage the acquired technology. Marketers continually provided feedback that many midmarket companies were managing their lists and sending promotional e-mail using Excel and Outlook. With little knowledge of the growing e-mail marketing space, they set out to build an application that would directly address the needs of the managers with whom they had met.
Based on a drawing Lewis had created on a "trade-show napkin," he and Fields had a working prototype within three weeks named Pexicom. They marketed the product by bartering with trade show/event management companies; Pexicom provided free use of their product in exchange for leads from the companies. These leads turned into customers and the customers referred new customers. As Lewis described their growth, "Sometimes the best plan is to listen to market forces and go in the direction that the market takes you."
Two years later, with 12 employees and a highly profitable self-funded business, Pexicom continues to evolve its business, primarily based on -- you guessed it -- customer feedback.
Herscott, cofounder and managing partner in MEA Digital, became a marketing expert through 12 years on the front lines in top-tier advertising and direct marketing agencies. He can be contacted at david.herscott@sddt.com.
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