rob masri: getting started
That was very good. I learned a lot.
pretty much covered everything that I was going to go over so .
Mr. Becker: I still have
two more pages.
Mr. Masri: Then finish
My name is Rob
Masri, and I am Vice President of Corporate Development and
General Counsel at Multicity.
I've been with the company almost from day one. We want to say
thank you to Netpreneur and to Mario for all they do for our
community and for our company. We've been involved with
Netpreneur almost since our inception as well.
Just to give
everyone a brief background on our company, it's a very unique
and interesting story. As we developed, we had one sales
strategy, actually more of a marketing strategy. We developed it
and grew the company into what we thought was going to be a very
profitable business, but then the market turned on us and we had
to shut that strategy down and restart.
We are in the
business of providing online communication tools to companies.
These tools include chat rooms and message boards and instant
messaging and web polls and anything that allows people to
interact with the Internet or interact with each other using
When we first
started the company, our focus was to try to get our technology
on as many websites as possible because we wanted to build what
we called the first open distributed network. A lot of people
who had been building Internet websites at that time had built
closed-off portal sites. If you think of a traditional Internet
portal, you think of Yahoo or E-Bay or AOL. These companies were
trying to get you to come to their URL and sit on their property
without escape unless you were to type in a new URL. Our
approach was very different in that you could come to our site
or through any of the companies that were using our technology.
As a new company began using our chat or our message board, they
became part of our network, and our network began to grow
exponentially. It was an interesting strategy. We got a story on
the cover of The Red Herring talking about how it was a
different approach from all the other people who had been
Our goal was
that we needed to make money, so we raised venture capital and
were monetizing our growth through banner advertisements. It was
the right thing to do at the time. This was late 1998, 1999, and
early 2000. When I first started with the company, I would call
different websites and basically beg them to use our chat room
or our message board. A lot of people would sign up because I
would give them very creative ways that they could make money
from it, such as revenue shares and other things that were very
popular then. At the time, one of our investors' goals,
obviously, was to take our company public, and the basic
Internet metrics then were traffic, stickiness, and retention.
Nobody really cared about revenue.
If you looked
at Multicity at that time, we had lots of traffic because we
were getting our technology on a lot of sites; we had lots of
stickiness because of our type of technology; and as to
retention, you can imagine that if you post a message on a
message board, you're going to come back and see who has
responded, so there was lots of retention. People would come
One thing we
did that was very unique was adding instant translation into the
products because we found that a lot of companies outside of the
United States began using our technology. We had websites in
Brazil, in Portugal, in Spain, Japan, India, and all over the
world using our technology. They found out about us through
online marketing initiatives and so forth. Remember that in our
concept of a distributed network, all of these technologies
interconnected. If you went to a chat room at a website in
Portugal, you were able to speak Portuguese with the people
there. If you clicked a button called Active Chats, the entire
Multicity network would be scanned and any other website that
had people in their chat room would show up in a little window
for you and you could click on that topic. Immediately, the chat
room you were in on the Portuguese website would convert into
that topic, regardless of the website it was on. It was a new
way of navigating around the Internet through chat rooms and
message boards and our various technologies. One of the things
we found was that people would end up on websites all over the
world without being able to talk to each other, so we embedded
the instant translation product to facilitate interaction.
As I said, my
goal early on was to generate revenue by getting more websites
to use the technology so that we could develop more impressions
and get higher CPMs (the price charged for an advertisement
based on the cost per thousand viewers). At the time, the CPM
rate was about $10, and we were showing millions of impressions
on any given day for $10 per thousand. As time went on, the CPM
rates started to drop, drop, drop. They dropped to $5, $2, 50¢.
Now it's something like 6¢. Then a lot of advertisers started
saying, “We don't want to pay CPM anymore. We want a CPC
deal—cost per clicks—or CPA—cost per actions.” It became
very burdensome for us to offer the technology in the way that
we were offering it at the time.
Let me step
back for just one second. Our goal was to get on as many
websites as possible. Instead of calling potential customers all
the time, as I and other employees in the company had been
doing, we decided that we needed a better way. We employed what
we called the pyramid strategy, which involved calling companies
that would give us access to lots of websites, companies like
Network Solutions and Web development firms. But, as Eric talked
about earlier, how would we get to them? The way we got to them
was through investors. We asked our investors to make
introductions. We asked people we knew in the community to make
introductions. It's always very important to have warm
introductions made for you, because a cold call is going to take
a very long time to turn in to something.
had to basically shut down this banner advertisement model,
however, because it didn't work. We weren't making the money we
thought we were going to make as time elapsed, so we decided we
were going to set up a direct sales team, which is where we are
now. The direct sales team involves the pipelines and the
funnels. We developed case studies for the various verticals
that we were approaching, and asked: Which verticals do we think
would benefit from our technology?
We took our
technology and developed it more into a solution than just
individual products, and we combined the products into what we
called a Minicity suite. We were able to sell this application
that would allow companies to aggregate communities of interest
around our technology to their websites. We were able to get
some marquee customers like PBS, UVA, Amnesty International, and
MTV that were able to help elevate us to the next level.
I developed a
quick Top 10 list of things that I learned in this evolution.
First is: Don't be afraid to give the first one away to the
right customer, because the right customer can bring you marquee
value, money, and the case studies and endorsement that you
give the second one away, because, at some point in time, you
have to show that your product or service has value.
clear objectives and expectations for yourself, for your
customers, and for your employees.
out and touch your customers. It's like that old commercial on
TV where the CEO walked around and gave everybody a plane ticket
and got them to fly to their customers. You would be surprised
how many CEOs have never even spoken to their top customers.
Don't be afraid to talk to your customers and get to know them.
sure that everyone is aware that the customer is king. Your
employees, everyone needs to know that.
your efforts so that everyone in your organization is on the
sales team. It's not just two or three people on the sales team;
everyone needs to be on the sales team, from the receptionist to
the programmer to the CEO.
carefully and offer solutions to your customers' problems. Be
willing to change so that your product moves from being a
“nice to have” to being a “must-have.”
Nine, and one
of the paramount things: Always under-promise and always
mindful of the clock. You have 30 days to get it done. If it
doesn't work, move to the next thing because you've got to start
generating revenue for your employees and for your investors.
cory marsan: gaining momentum
Rob. I can certainly echo a lot of those comments.
I am Cory Marsan,
Executive Vice President of Sales & Marketing at ServiceBench.
I want to thank everybody. I'm pleased to be here this morning
with all of you.
I guess that I
have a few qualifications relative to the topic at hand today.
For better or worse, as it were, I have spent my entire career
in sales and marketing. I won't go into how many years that's
been, but it’s been at some very large companies. I started my
career with the largest company in the world at the time, back
in the early 1980s, AT&T. Over the course of the past 10
years I've been with entrepreneurial firms, starting with being
one of the founders of Net 2000 Communications in 1993. We grew
that from just the four founders, where we pretty much did
everything and were responsible for all the sales, to an
eventual sales force of 250 and 1,200 employees.
I've started with a company called ServiceBench, and I’m back
in the saddle as EVP of Sales & Marketing there. We're a
technology company headquartered in Fairfax, Virginia, and we
provide a Web-based solution for more efficient supply chain
management. That is, we allow manufacturers to more efficiently
complete post-sale transactions with their many supply chain
partners, whether that be independent servicers, parts
distributors, etc., for transactions such as warranty claims,
parts ordering, and dispatch. I've come a long way from
In terms of our
stage of development right now, we are probably somewhere
between a stage two and a stage three. I'm going to spend the
next few minutes sharing some of my experiences in “customer
acquisition” not only at ServiceBench, but at Net 2000, as
well, including some of the things you want to think about
relative to customer acquisition. I love that term “customer
acquisition.” I was asking if it was the new term for sales in
2002. In many cases you do find that you're acquiring these
customers in interesting ways.
At this stage,
I'm going to assume that you have developed a very compelling
value proposition that is a differentiator for your product or
service in the marketplace. You've identified who your target
market is and you've also established those very, very critical
reference accounts because you're going to need them. You must
begin to leverage them within their industries and potentially
across other industries as well.
So, you've had
some success in stage one. How do you leverage it to get into a
stage two situation? One of the first things you need to think
about is your channel distribution. How are you going to sell
this product? Is it going to be a direct sales force on a
face-to-face basis? Are you going to use inside sales or
telemarketing? Will you rely on an indirect sales force, or,
potentially, combinations of all of the above?
that you've decided to go with a face-to-face direct sales
approach. What kind of skill sets do you need to look at in
hiring? In the case of ServiceBench, for example, we're a
technology company that is typically selling to Fortune 500
manufacturers. It's a complex sales process that typically
involves multilevel positioning. For me to hire a recent college
graduate or someone with a couple of years of sales experience
might save me some money in the short-term, but it will cost me
in the long-term. We need very senior salespeople with proven
sales track records. Not that that's always a formula for
success, but that's what we are looking for.
At this point
you'd better have developed a compensation plan, and that
compensation plan needs to be designed so that it attracts the
type of person you're looking to hire. It's also going to be
designed so that it's incenting the correct behavior, because
compensation will drive behavior. Make sure that your
compensation plan is in alignment with your business plan.
Next, you need
to think about how you are going to align the sales force. What
kind of territory management do you want to apply? Again, this
is going to depend very much on the products and services that
you sell and the market you're selling to. There are lots of
choices as far as that goes. Are you going to align by industry
segments? By product specialties? Are you going to align them
geographically? In the case of ServiceBench, it made sense for
us to align relative to industry segments or industry verticals.
We've had a lot of success in three specific verticals. One is
appliances, with reference accounts such as Whirlpool,
Frigidaire, and others; another is consumer electronics, with
customers like Mitsubishi and Harman Kardon; and the third is
lawn and garden, with accounts like Poulan, AYP, and Shindaiwa, all of which I had never heard of before
November. I go to Home Depot these days and it's a whole
different story. In each of these verticals, the supply chain
process is somewhat unique. Also, the players seem to be fairly
entrenched in various trade associations, so it makes a lot of
sense to organize on a vertical basis and develop that subject
matter expertise within each industry segment. On the other
hand, in our early stages at Net 2000 our target customer was a
middle market company willing to look at an alternative to Ma
Bell. We had a pretty large nucleus of potential prospects, and
it made sense to start aligning on a geographic basis. Later, as
we matured within our larger markets, we began to also organize
on a vertical basis within those geographic regions.
Now that you've
built the foundation, it's time to start leveraging some of
those reference accounts. I'm assuming that you probably have
about four or five salespeople now who are going to do that. You
need to start developing some visibility surrounding your
company and some credibility. Those reference accounts will help
you get there. The best piece of advice I can give you relative
to that is make sure you're taking care of them. To get those
accounts initially, as Rob mentioned, you probably didn't make a
lot of money on them. You probably had to give some things away.
They took a big risk to come with you, since you're a relatively
unknown company. In return for that, however, they'll give you a
lot. You need to continue to cultivate that relationship and
turn it into a partnership to the extent that you can. With
ServiceBench, we actually put language in our initial contracts
indicating that these clients would allow us to use their names
in our marketing materials and would help us with testimonials.
That's not to say we didn't have to earn it. It wasn't a given.
Only if we were performing to the levels that we had promised,
would they do so. Think about those things early on because
you're definitely going to need them.
At this stage
you also want to start validating your ROI (return on
investment) model. When you sold those initial customers,
chances are you developed some sort of ROI formula that you
could share with them. As time goes by, now you can start
measuring or benchmarking. Did you, in fact, follow through and
meet those performance standards that were set with those
initial marquee customers? You're going to need those statistics
for a couple of reasons. Certainly, they’re going to validate
what you said, so you're going to add a lot more credibility.
Chances are that your customers are going to want to help you
work through those statistics. If you actually are meeting or
exceeding the standards you set, you have a great story to tell.
Your customer is going to want to tell that story internally, as
well, because it validates his or her position in selecting you
as a vendor in the first place. There's a win-win scenario going
on here. With those statistics, I would encourage you to develop
some case studies. Rob and Eric both alluded to that. Case
studies are very important. They provide a compelling story of
your credibility in the marketplace. Trade and business
publications love to pick up stuff like that. Use them in your
marketing materials, your press packs, your website, and so
forth. Third party objective articles are very, very powerful.
way to advance your product is to go through associations.
Understand the various trade associations that your customers
work with. Look for opportunities to speak within them and speak
at events in general, like the Chamber of Commerce or events
such as this. As a matter of fact, I think Netpreneur News
just picked up a press release that we sent out on a new product
offering. Use what you can from a public relations perspective
and leverage your successes. You don't necessarily have to pay
for play at this stage of the game.
partnerships are another area you want to look at. Are there
potential partners out there that have complementary products or
services to yours? What's in it for everyone? Make sure that
there's a balance in terms of a win-win on both sides of the
coin. They can help you get more feet on the street and
potentially open up new markets for you. That was one of the
strategies that helped put Net 2000 on the map.
In terms of
growth, you need to understand when it makes sense to expand.
Seven or eight years ago, the name of the game was bigger,
better, faster. I think we've learned a lot since then. Today,
logic prevails. It probably makes more sense to take a
conservative approach to your growth. Make sure that you've
nailed your product down and you understand your market
requirements before you enter new ones.
Quickly, I have
five lessons learned. Actually, I could be up here for about
three hours with lessons learned, but I'll just share a few.
They're in no particular order.
Number one: As
you build your business plan, your sales forecast, your sales
cycle, whatever you estimate it to be, I would advise you to add
about 20% to 25% to it.
Two: Know and
learn from your competition. Don't take it for granted that just
because you have an advantage today you'll have one tomorrow.
Three: Don't be
afraid to make mid-course corrections. Believe it or not, we
don't know it all or have a crystal ball.
focused. There is a lot of opportunity for distractions. Whether
it’s alliance partnerships that may or may not make sense for
you or customers who want you to do custom development work that
doesn't necessarily transcend into other client requirements,
those things can take you away from your core competencies and
core offerings. Stick to your knitting.
this is in concert with what Rob said: Love thy customer. It
cost you a lot of money to get them. You can continue to grow
those accounts, and, of course, you want to leverage them in the
form of testimonials and so forth. Don't squander the position
that you worked so hard to build with them. Thank you.
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