Indianapolis Business Journal convened a panel of experts at its Technology Power Breakfast on March 7 to talk about
industry issues including entrepreneurs, universities and online marketing.
Panel members included Don Aquilano, managing director, Allos Ventures LLC; Aman Brar, president, Apparatus Inc.; Tim Kopp,
chief marketing officer, ExactTarget Inc.; Michael Langellier, CEO, TechPoint; Jenny Vance, president, LeadJen LLC; Brad Wheeler,
vice president for IT and chief information officer, dean and professor, Indiana University.
The session was moderated by IBJ reporter Chris O'Malley.
The following is an unedited transcript of the discussion.
O'MALLEY: Well, first I'll ask a few
questions here
of each panelist, and for those who
don't know,
Mike was among a handful of local tech
leaders who
recently visited the White House, I
believe it was
the Startup America event. And, Mike,
could you tell
us a couple of big takeaways you had
from your visit?
LANGELLIER: Sure. Good morning. Yeah, it
was a pleasure
to be able to join a handful of folks
from Startup
America. For those that aren't
familiar, Startup
America is sponsored by the Case
Foundation and
Kauffman Foundation and it's focused
on entrepreneurial
growth and advocating for startups
across the country,
so Michael Coffey from
DeveloperTown,
developer Matt Hunckler, Kevin Hitchen
from Localstake,
Dustin Sapp, I know Dustin and the
TinderBox guys
are here today, we all got the
invitation to
go out there, and it was eye-opening
from several
different perspectives. I think Obama
must have a
Washington, DC e-mail LISTSERV because
regardless of
where we went, whether it was the Case
Foundation or
the National Press Club or the White
House, everybody
knew that there were two things that
they should
talk about, one was immigration reform
and then the
other one was also crowdfunding, so
obviously Localstake
was very relevant to that
crowdfunding
conversation and given some of our
international
presence and our universities here
immigration
reform was pertinent. But there are two
kind of main
takeaways for me and for us, one is the
workforce challenge
that we talk about a lot, that's
a nationwide
problem and everybody was struggling
with ways to
kind of grapple with that, and so that
was one keen
highlight and obviously the immigration
reform conversation
factored into that. One of the
interesting
tidbits from that perspective of being
out in DC is,
this was right before the sequester hit
and so regardless
of what you believe about the
sequester or
what's going to happen as a result of
the sequester,
folks in DC were saying that they were
expecting a
hundred thousand jobs to be lost, so it's
a really interesting
dynamic when you think about the
workforce challenge
but simultaneously you've got the
supply-demand
problem with people trying to fill jobs
with high-skilled
labor but also folks prospectively
losing jobs
that are highly skilled and what's that
that going to
mean for us and if there's opportunity
there for us.
The other thing that was really
evident is that
people don't know very much about
Indiana, surprisingly.
We had the opportunity to
give a presentation
to the CTO of the United States,
how about that
for a title, and Todd Park, the head
of the SBA,
head of patents of trademarks, a couple
special advisers
for the Administration, and it's
surprising how
little they know about what we do, and
so we went with
a very deliberate, bold intention of
saying "These
are the successes that we've had."
They don't
know things like ExactTargets in
Indianapolis.
A lot of them have heard of
ExactTarget
because of the IPO and things like that.
They don't
know that the most powerful supercomputer
in the world
is at IU. You start to connect those
dots and then
all of a sudden people start to get
more excited.
But it's things like the Kauffman
Foundation research
that found that only five other
metro areas
have produced more Inc. 500 companies per
capita than
Indianapolis has helped to get us up on
that map, but
it was very evident that we need to do
more to get
up on that national stage more
consistently,
especially if we're fighting for talent
on a national
basis.
O'MALLEY: Thanks. And, Mike, a lot of folks
were pleased
when you were named CEO of TechPoint in
part because
you have a pretty keen view of the
startup community.
You can often be found hanging
out getting,
liquored up on coffee at the Speak Easy,
for example.
How does TechPoint ensure that these
distinct groups
of young innovators and the
established
companies remain engaged with each other
for their mutual
benefit?
LANGELLIER: I think we're doing a lot of the
right things.
I think places like Speak Easy, places
like Launch
Fishers, I think though we live in an
increasingly
virtual business economy, places like
that where people
that are in similar phases in
business development,
similar phases in life can get
together is
very, very important. Obviously, capital
continues to
be something that's talked about and
different views
on that, and one interesting stat
from Karen Mills
of the SBA was that I think it was
in the one to
four million dollar investment range
over the past
four years or so 70 percent of those
dollars nationwide
have been invested in three
states, California,
New York, and Massachusetts. So
I think it's
obviously a combination of things, but I
think that the
success that we've had and we've seen
in companies
like ExactTarget, Interactive
Intelligence,
Aprimo, Angie's List, you can go on
down the list,
I think that begets people that are
more kind of
emboldened and believe that they can
build things and do
things, and then I think also
just creating
places where entrepreneur folks can get
together and
support each other is important.
O'MALLEY: Great! Thanks, Mike. Don, as we
mentioned, Allos
just raised I think about 40 million
dollars for
a new fund at a time when a lot of
venture money
is backing out of the early stage tech
space.
Can you give us a sense on how were you able
to achieve that
and to what sorts of companies would
you like to
consider as candidates?
AQUILANO: Good morning. The way we were
able to do it
was we help fill a significant gap here
in Indiana and
contiguous states. Mike talked about
all the things
that are sort of going on locally that
are very compelling.
We've got universities and
their incubator
efforts, we've got organized angel
efforts that
are seeding early stage companies, we
have TechPoint,
we have Elevate, IEDC, we've got a
lot of great
early stage activity. When those
companies that
are deserving and needing capital to
go to that next
stage, the early growth stage, they
have very few
places to go and that's been sort of a
problem that
has ebbed and flowed for the last decade
or so, and while
it's a very difficult economy to
raise a fund,
we went right to the successful tech
CEOs and entrepreneurs
in the state who are keenly
aware of the
issue and understand that there are
great companies.
The ecosystem is vastly improving,
it has been
for the last decade or so in Indiana, and
they stacked
up their leadership to say "Yes, we want
to help raise
this money," so rather than starting
with institutional
funded funds, pension funds, we
went right to
the folks who have built companies and
understand the
gap, understand the need and
understand the
opportunity that funding and fueling
great entrepreneurs
can have in this state and that's
how we raised
the fund. Our whole first closing was
largely high
tech, high net worth individuals who
sort of lived
in this ecosystem and understand the
opportunity.
So it wasn't easy to raise the fund,
but we raised
it in the right way. And then our
second fund
we had institutional investors sort of
come alongside.
The types of companies we're looking
for, there's
a lot of entrepreneurs in this room who
sort of fill
this need and there's a lot of people up
here who are
certainly in the space that we target.
We love IT,
we love software, we love software as a
service, we
love technology-enabled business
services, health
IT, health informatics, it's who we
are, it's
what we've done, it's the types of folks
who have backed
us, it's the type of companies we've
backed in the
past. There's a lot of great activity
here in town,
and we're a regional focus, we used to
be nationally
focused, now we're regional. There's
so much going
on here regionally that that's where
our focus is
with Allos. So as soon as a company
sort of gets
past that seed stage and is looking to
go to that next
level, that's when we become very,
very interested
and are passionate about backing
great entrepreneurs.
O'MALLEY: Great! If I'm an upstart sitting
out here and
I've got some revenues, a pretty solid
stream of revenues
coming in, what do I need as an
entrepreneur
to know in terms of what kind of
companies are
turn-offs and turn-ons, to use a
"Dating
Game" term here, I guess, for the types of
companies that
you find attractive?
LANGELLIER: You have to have beards.
AQUILANO: I was going to say, beards are
very helpful,
that's right. Well, you know, we love
entrepreneurs
who are keenly aware of their customer,
who have a passion
for and they understand their
customer inside
and out, understand how they make
decisions, what
their pain point is and are building
a solution to
solve it. That sort of passion, that
understanding,
comes across very, very clearly. The
lack of it also
comes across very, very clearly.
When it works,
it's very contagious, you'll see us in
a room, we get
excited, regardless of the space that
it's in,
and people who can articulate their pitch,
if you will,
their value proposition very quickly and
succinctly is
also a big benefit, and you're also
sort of known
by the company you keep. If you've got
a strong management
team, strong board, strong people
who introduce
the company to us, that's very
important.
You know, the turn-offs, you know, if it
takes you five
minutes to try to tell us what you do,
if you don't
seem to have a great insight into your
customers, we
joke, you know, if you say "This ain't
my first rodeo"
a couple times, that probably turns
us off.
If you use the word "conservative" too many
times, that's
a red flag. If we see you parking in a
handicap spot,
we're not going to fund you if that
happens, but
those are the things. If we see you
passionate about
it, we get passionate about it, we'd
love to join
forces and help.
O'MALLEY: Well, that's great. Thanks, Don.
And just a reminder,
if you do have a question we
certainly welcome
the questions and any bad jokes you
may have we'll
be happy to mention those as well.
Dr. Wheeler
has developed a number of ways of
reducing IU's
IT costs and these include a big
reduction in
the cost of digital textbooks and Adobe
software licensing.
Dr. Wheeler, can you tell us
about one of
the most innovative arrangements your
department has
implemented in recent years, maybe
something such
as IU Anywhere, for example?
WHEELER: Yeah, I think there's two things
that popped
to mind and they really go to the
entrepreneurial
space here in the state of Indiana as
well.
For any of you parents out there you may have
noticed after
you pay for college there's this thing
called textbooks
which seem to be quite a little
add-on for the
experience. The shift to digital
really gave
an opportunity to try to fix a pretty
dysfunctional
market that wasn't working for
students, it
wasn't working for parents. Actually,
it wasn't
working for authors as well. So we jumped
out with an
Indiana company, Courseload, Mickey
Levitan is here.
Mickey and his company built some
software so
that you can get the content in digitally
and students
can annotate it and highlight, it runs
on notebooks
and iPads and Droids and whatever, so
the technology
was there, but how do you get the
content deals
in place? Well, IU had used its
throw-weight of 110,000 students to go and negotiate
with Microsoft
back in '98 and cut a deal to get all
of their software,
all of our students on all
campuses to
have access to all, practically, all of
the Microsoft
software just as part of being a
student at IU
and we were able to cut that deal with
Adobe finally
as well. So what can we do with
textbooks?
It's digital content. And I am happy to
announce that
as of yesterday we finally got the last
big elephant
in the fold with one of our big
publishers,
we've now got over 70 percent of the
dollar volume
of textbooks at IU in low cost
licensing deals
for our students, but it took a long
time of negotiating
and getting the whole ecosystem
put together
in this path to digital, and I think
that it's
one of the ways that technology can
directly impact
the cost of attendance at
universities
and that's a topic on all of our minds.
O'MALLEY: Super! Could you also point out
maybe some ways
in which educational and research
outcomes have
benefited from some of these concepts?
WHEELER: Absolutely. I was just on a call
yesterday about
the life sciences and some big things
going on with
what's happened with federal funding
and such and
I'm very pleased to hear that two of our
leading scientists
and researchers from the med
school are just
singing praises of IU's IT
capabilities
because so much of what they do is
modeling and
simulation and big storage and working
in massive data-sets
with researchers in their field
who may be in
Australia or Europe or wherever, and as
many of you
know, in April we'll be dedicating Big
Red II, it's
the first university-owned one petaflop
supercomputer,
which is just a machine that goes real
fast, but we
dedicated Big Red about six years ago,
it's geriatric
with a gray beard, beyond Michael's
beard, at this
point in time. But by scale, Big Red
was about a
40 teraflops machine, this will be over a
thousand teraflops,
and this infrastructure and our
approach to
IT, which is a philosophy of abundance
within reason,
so that our researchers, our students
have the tools
they need, they're not rationed that
one school has
great technology but the other school
on campus doesn't,
or some graduate students have
access but some
graduate students don't, and if we
want more beautiful
paintings, don't ration the
canvas is part
of the philosophy of making this
happen, and
because of the scale of the university we
can roll up
the resources and the people and support
around them
to enable this environment for our
research to
flourish.
O'MALLEY: Super! Thanks, thanks a lot.
Well, Tim, most
are familiar with e-mail marketing
and ExactTarget,
but you guys have been cultivating
some other forms
of digital marketing in recent
years, it's
been kind of hard to even keep up with.
Can you tell
us a few of the innovations by
ExactTarget
lately and how they're relevant to the
evolving digital
marketing trends?
KOPP: Sure, I'd be happy to. Good morning
everybody, delighted
to be here. We still love the
e-mail business,
there is an incredible amount of
innovation happening
within e-mail, but as we think
about kind of
our space, we're increasingly media
agnostic and
we're more focused on what the consumer
wants, so e-mail
will continue to be the workhorse in
digital communications,
no doubt about it. We kind
of view these
three key pillars internally of e-mail
lives, e-mail
is important today, it will continue to
be very important
in the future, but there's no
question that
cross-channel is the future and by
"cross-channel"
we mean e-mail, mobile, social on the
web all coming
together and data is king, so we talk
about those
three pillars of e-mail lives, it's very
important, cross-channel
will be the future. Data as
the foundation
that drives all of that will really be
what propels
cross-channel forward. The couple of
key innovations
that we have really line up with
that, if you
think about mobile and social, those are
probably the
two areas that we've driven the most
innovation.
First, if you take a look kind of at
these devices,
just the mobile device has absolutely
changed the
world and will continue to change the
world.
Digital marketing, if you look at Gartner
Research, will
now be a top three CEO imperative for
over 90 percent
of CEOs over the next few years, so
really understanding
digital marketing in the way
it's intersecting
in the lives of consumers. So what
we've done
is really built out it's all about meeting
consumers wherever
they are, so from a mobile
standpoint how
many of you guys -- Well, I know
everybody's
got a smartphone, but how many people
have more than
30 apps on their phone? That's most
of the room.
So there's app fatigue. Many times
after you download
an app, it has a lot of novelty
for the first
few weeks, maybe the first few months,
we've developed
a new capability we call MobilePush
and that is
all about once you download the app, it's
a reengagement
tool that sort of allows marketers to
prompt and push
you back into the mobile app that
they've
given a consumer, maybe they've downloaded
the first time,
they've paid a bill, they've tried
something out,
but now they need to go back and
continue to
reengage, so MobilePush will be one big
one. The
second one is just SMS technology, when
you're in
store, in stadium, at event, the ability
sometimes at
that point you will want to get into a
rich e-mail
dialogue but it will be very easy to send
a text campaign,
text in for more information and
send it through
a short code that then allows a
marketer to
drive in and have more rich conversation
after that.
So those will probably be the two big
mobile ones,
MobilePush and what we're doing in SMS.
From a social
standpoint two really cool
technologies,
our overall belief is that marketers
are having software
fatigue a lot of times, you know,
adding a sixth
software solution, a seventh software
solution, so
we believe all of that is going to
converge into
one singular piece of software and we
believe mobile
and social will be important parts of
that.
So the social we've launched a new capability
we call SocialEngage.
SocialEngage is all about
driving customer
service opportunities on Twitter and
helping to manage
kind of that portal of the
real-time web
that's happening on Twitter. So
imagine if you're
Delta Airlines, your Starbucks,
you're a
big distributed enterprise brand and you
need to take
all the Tweets that are coming in,
distribute them
to the brand managers and make sure
they get answered.
We do that through the capability
that -- You
might remember we bought CoTweet a few
years ago, that
has now morphed into this capability
we call SocialEngage.
The next one will be
SocialPages
and that allows marketers to engage a
consumer on
Facebook and then drive them. The best
way that you
can monetize social, quite honestly, is
get them to
sign up for your e-mail list, so use
social as the
point of engagement, grab your
consumers on
Facebook and Twitter but then convert
them to your
e-mail list so you can monetize it and
SocialPage is
really a great tool that helps find
marketers on
Facebook and quickly get them engaged
with e-mail,
so those are probably a couple of the
key innovations.
O'MALLEY: Great! Well, Tim, how does a
company the
size of ExactTarget, which is no small
startup anymore,
how does it remain nimble enough to
quickly respond
to competitors and to new marketing
channels?
I mean it seems that every day there's
another firm
that offers a subset of what you're
offering or some iteration
of it.
KOPP: Definitely. First off, if you're not
in a space with
a lot of competitors you should
probably worry
because it means that you probably
don't have
a viable market, so we think it's great
that there's
so many competitors kind of gunning for
the space.
If you look out over the next decade and
if you look
at what's happened with ERP maybe a
couple decades
ago and then CRM, the next 10 years is
going to be
the decade of marketing, I think there's
no doubt about
it, it is absolutely going to be the
decade of marketing,
it's going to be the decade of
the CMO, and
the CMO is absolutely in the best place
to drive the
change management agenda for the CEO and
for the board.
So I think what you're going to find
is this decade
of marketing software as a service and
our plan and
what we are today is the global
marketing software
as a service leader. So we really
have used our
size and scale to our advantage,
frankly.
We have invested very aggressively back
into R&D.
So the core of your question really comes
back to innovation,
it's innovate or die, and if
you're not
reinvesting quickly enough back into R&D
that's where
companies end up becoming troubled. So
we're taking
an incredible percentage of our top-line
revenues and
investing them aggressively back into
R&D, almost
20 points of the top line going back into
R&D, which
is about three times the size of our
nearest competitor,
so we're investing very
aggressively
back into R&D. The second thing we're
doing is creating
an open platform. There is no
single software
company that can solve all of their
consumers'
problems, they're just too diverse, so
what we believe
we need to do is open up our platform
and let many
of the other leading software companies
across the city
and across the world, for that
matter, build
native applications on top of our
platform that
complement what we're already doing.
So I think it
comes back to using your scale, using
your size, not
getting complacent, investing very
aggressively
back into R&D but then also opening up a
platform to
allow others to do massive development on
top of that
for you.
O'MALLEY: Sounds good. Thanks, thanks, Tim.
Well, Aman,
what has been driving your growth? In
fact, over breakfast
you were talking about the need
to hire some
more folks. What's been driving your
growth in recent
years and how does that reflect the
needs or some
of the changes in the market right now?
BRAR: First of all, good morning, beautiful
people, it's
great to see you all. The last few
years have been
a great ride for Apparatus. You
know, over the
last decade the company just has had
great year after
year amount of growth. A handful of
years ago it
was a seven million dollar company,
we're exceeding
20 million in revenue now, we have
140 full-time
employees with benefits all located in
downtown Indianapolis
and we're thrilled to be part
of the technology
story here and we're certainly
Indianapolis's
next great technology company, so
we're certainly
further behind where companies like
ExactTarget
are now but we're trying to put the pedal
to the metal
and I think we'll get there and we're
excited about
it. The growth, it's been interesting,
solutions like
Tim's solution, point solutions and IT
are actually
simplifying in many ways because of
software as
a service, but macro economically the
environment
around information technology is actually
getting more
complex, right, sometimes its prowess is
because of choice,
sometimes it's because the
standard is
now higher because of software as a
service, that
"Hey, why is this a custom application,
why is it so
long, why does it take so much care and
feeding?"
and essentially while we design and
implement IT
solutions the place we're crushing in
the marketplace
is actually through the management of
those IT solutions,
so we can create that same
experience that
you might have with SaaS for a custom
application
for your general IT infrastructure, and
what that's
led to, and it is a secret here in
Indianapolis,
is that the company at 14th and
Meridian is
actually managing thousands and thousands
of servers globally
for multinationals and for
startups right
here out of Indianapolis and part of
the excitement
of our own growth model is that we're
going to be
an Indianapolis-centered company, so
while we recently
hired a national sales executive
out of Atlanta
as we continued our sales march
forward, our
employee headcount, our growth is going
to be here in
Indianapolis and that's how we continue
to scale, and
then the other thing I'd mention is
that we have
more clients, so what I mean by that is
it used to be
it was the CIO, the director of
technology,
certainly the CEO cared a little bit, but
the rise of
the CMO, for example, has also been a
really interesting
benefit for our company. There's
just a lot more
interest in what's going on, revenue,
dashboarding
and the CMO, quite frankly, is an
enormous client
of IT services now, and if you kind
of read the
intellectual press out there in IT you'll
see that recurring
theme that the need for IT has
left just the
realm of the CIO in business, so we're
real excited
about our growth. You talk about the
talent, we were
all talking about it at the table,
it's a fight
every day to get the type of technology
talent that
we need here in Indianapolis to continue
to grow.
You know, we think a lot about -- I was
thinking about
Mike's comment about how people really
don't know
and understand Indianapolis yet and it's
widely true
and sometimes I think about it in the
sense that people
don't remember successes around the
city very easily
or around a person. I was an
offensive lineman,
so I might have a hundred great
blocks in a
game but if I give up the one sack from
the left side,
everyone's going to remember that,
right, and what
I would argue is while we certainly
are a very business-friendly
state, you know,
businesses are
made of people and the thing that
drives me crazy
when we're out there recruiting at
colleges or
trying to get an Indiana Hoosier back
from California
to Indiana is that we forget in our
legislation
that companies are made of people and
things like
legislation that constitutionally ban gay
marriage, they're
killing companies like us that need
to recruit all
people, not just a certain segment of
America, we
need everybody in America who want to
live in Indianapolis,
we want Hoosiers that have
different life-styles
to be here in Indianapolis, and
then I'll
tell you what, we're hearing this at
college campuses
and we're hearing it from Hoosiers
that might've
left the state and I'm hearing it from
our peers in
Mountainview and other places where I've
lived, the second
that hits the news I get an e-mail
saying "There
you guys go again," and to me I look at
that as we could
be doing 99 things right but there's
a couple things
that we're doing wrong, it's like
giving up that
block from the left side, that's what
everybody remembers,
and I really would just urge as
far as our recruiting
efforts are concerned, let's
not make it
any harder than it already is because we
can't build
mountains and oceans here but we can
certainly do
our best in a lot of different
categories.
(Applause.)
O'MALLEY: Aman, where are businesses missing
the boat on
kind of maximizing their IT spending
dollars today,
especially the big companies that you
work with?
BRAR: It's interesting to me kind of with
big companies
because startups are a lot savvier on
kind of how
to construct this really leveraging, you
know, cloud,
leveraging SaaS from the get-go. The
analogy I use
is when you turn your water on at home,
the water comes
out of your faucet and you do
something with
that water, you might cook with it,
you might drink
it, you might replenish yourself,
fluid yourself
for your next bout of exercise, stay
hydrated, but
when you turn that faucet on we take
for granted,
everybody in this room, what is actually
happening behind
the scenes, right, there's this
enormous infrastructure
that's getting water from
somewhere to
your kitchen and there's probably a
hundred people
touching that supply of water to your
sink, okay,
yet we don't really care about that,
right, we want
our water, and one of the things we
find in multinationals
and large IT firms is they're
having a hard
time letting go of the pipes and the
electricity
and the people that are involved in
getting the
water from point A to point B and what's
happening is
all their resources and their
intellectual
capital is focused on that because
that's really
hard work, that takes a lot of
expertise and,
by the way, there aren't enough people
out there to
even service your current needs, and so
our argument
is just focus on what you're going to do
with the water
and let companies like Apparatus, let
companies like
ExactTarget really give you the thing
that you need
to fuel your business, take that IT
headcount, take
those other heads, and the same
argument holds
true for companies like Blue (can't
decipher from
speaker) in the cloud space and go
focus on driving
value for your internal clients, for
your clients,
et cetera, and that's essentially the
shift that,
quite frankly, has been much slower than
I think people
predicted five or six years ago and
that's kind
of the march that we're continuing to
move forward
with.
O'MALLEY: Great, thanks a lot. And, Jenny,
sorry, we haven't
forgotten about you here.
VANCE: That's okay.
O'MALLEY: You have an interesting company.
How did you
identify this niche in sales lead tools
and what did
it take to make it a player, pretty
successful player
so far?
VANCE: Well, a lot of people might not know
this, but I
started resumeing I would do anything but
inside sales
in my career, so now I've made a company
founded on that
is a little bit of a 180. So I think
one of the things
that we identified and I identified
probably early
on in the business-to-business
community with
lead generation is that it's treated
very often as
an afterthought, I think that's why a
lot of people
maybe know they want to start their
careers there
just to get a foot in the door and move
on quickly,
it's an area that is treated in many
organizations
as a pure volume plate, like "Let's
just get the
volume out there into the market, get
the coverage;
if we burn some bridges fine, we'll
find some opportunities
along the way," and I've
always viewed
it a little bit differently in terms of
the opportunity
there. I look at our startup
community and
it seems like companies are constantly
struggling with
the whole chicken or the egg thing,
what comes first,
the sales pipeline or the funding.
Investors really
want to see a strong sales pipeline
to feel confident
making a good investment and yet
companies need
funding in order to go capture market,
and the way
that tends to get approached is to go
hire enterprise
sales reps, start working some deals
and then I start
to draw any conclusions about my
market from
a use case of a handful of deals that are
either in my
pipeline or the few sales ones that I've
had, and what
we found in working with a lot of our
clients is that
sometimes that can be a false-
positive, sometimes
there are better leading
indicators within
the market of potential. One of
those, obviously,
as Tim mentioned, is digital
marketing, but
the lead generation space, if you
think about
it in terms of the volume, scope and
coverage across
the market, it's the group that's
having the largest
number of live dialogs with the
marketplace
within a company and yet many companies
aren't cultivating
a lot of knowledge from that and
LeadJen has
always seen that as a tremendous
opportunity
in the marketplace to not only get out
there and find
those qualified leads, obviously you
have to yield
revenue in order to justify a program
like that, but
there's a more scientific approach
that can take
place behind it. Where a lot of people
are approaching
it as individuals within those roles
on an ad hoc
basis, it can be approached with a very
clear process
behind it and some really important
measurements
coming out of it that will better
understand the
market. An example of that is one of
our clients
that was very fixated on "financial
services as
a key market for us, that's where we're
getting, you
know, the best potential and the largest
deals,"
we have to look at that, of course, revenue
is obviously
the first thing you're going to look at
in terms of
analyzing where there may be potential,
but through
a lead generation campaign we identified
three markets
that had three times the response rate
as financial
services. It's worth exploring, for
sure, and we
feel like that type of information is a
really compelling
part of how lead generation
strategies can
really drive growth in the startup
community.
O'MALLEY: It's fascinating the amount of
information
that you guys have compiled as part of
your tools here
for folks. You have been at this not
as long as some
of the other companies that are up
here.
Do you still have some key lessons fresh in
your mind that
you learned when getting LeadJen
started and
carried forth to today that might benefit
some tech upstarts
in the audience?
VANCE: Sure. I guess in terms of sales
growth, the
thing that's been helpful for me as a
business owner
is looking at taking the most tactical
thing off the
plate first. It's interesting and I've
found that I've
done it myself but I've seen it in
other business
leaders and some other young companies
that we've
worked with is oftentimes we want to take
the most difficult
thing off our plate instead of the
most tactical
thing and really in terms of driving
growth it's
a lot easier to train someone to do some
of the more
tactical things and allow an individual
to focus who's
already trained and prepared to deal
with the more
difficult tasks and strategies, and I
think that's
kind of how lead generation plays in,
too, when you
look at the sales process and what's
easiest to transition
in terms of knowledge as a
founder to that
next level of sales, is it easy to
transition all
my core competency about my industry
or is it easier
to find someone who I can transition
the knowledge
that it takes to get that first meeting
and then I as
a founder can handle that meeting and
then as I get
busier and busier I start to look at
that next most
tactical piece of the sales process
and take that
off the plate next, so I think that's
been helpful
for us in our sales growth, too.
O'MALLEY: That's great news, that's good
advice.
In the last decade we've seen a lot of tech
companies arise,
have become giants, you have the
Aprimos, the
Angie's Lists, ExactTargets, Interactive
Intelligence.
Just to the entire panel, do you have
any thoughts
about how these big players have
fostered growth
and continue to foster growth along
some of the
smaller tech companies here?
LANGELLIER: I would say that I think there
have been two
main things that I've seen, we talk
about wealth
creation and obviously wealth creation
begets more
investment and more wealth creation and
I've heard
the stat and I don't know if it's true but
how many millionaires
are created in some of the IPOs
that happened
recently, so that begets more
investment,
which begets more startup and
entrepreneurial
activity, but I think the thing that
is less tangible
but is most just through the
transitions
in my life that I've seen is there's a
difference in
mindset and I think through
experiencing
success people go from kind of a natural
scarcity mentality
to much more of an abundance
mentality that
says "I've done this before, I've seen
it done, I've
been part of it" and a little bit of
you've gotten
the hit and you want to do it again and
I think that
some of just being part of success on a
corporate level
with all of the companies that you
mentioned, I'm
certainly excited about the capital
implications
but I'm also excited about having a
whole fleet
of people who have experienced broad
scale success
and are eager to go do it again. I
think we start
to see that as people move even out of
those companies
and strike out to do things on their
own.
AQUILANO: I absolutely concur with that. We
have a capital
solution, we fill part of the gap, but
it is entrepreneurs,
right, and experienced
entrepreneurs,
and I think IBJ ran a great piece, I
forget how long
ago, it was about Software Artistry
was sort of
a big bang, right, and we've had all of
these other
great companies of late that spawn not
only folks who
are willing to invest as angels or in
our fund but
have experienced entrepreneurs who go
off into the
life blood of what we do. Even at this
table we've
got Baker Hill. Dave Becker opened
NASDAQ last
week with First Internet Bank who grew
through two
recessions, I mean this is great stuff,
Aprimo, all
the folks we've talked about, that is
very powerful
life blood of this economy, it's a
mindset, but
it's simply the number of experienced
entrepreneurs
that we're seeing create new companies
and that's
getting better and better by the year.
LANGELLIER: It takes the fear factor off the
table.
AQUILANO: It really does.
WHEELER: From the university angle, these
are really essential
enabling conditions. We are
still struggling
I think to grow the depth of an
entrepreneurial
culture in the university so that
Indiana kids
don't come here and think "Okay, well,
when I graduate
I've got to go work for Procter &
Gamble, or I'm
going to shift state or go somewhere
out of state."
The School of Informatics has
recently had
their entrepreneurial competition called
BEST, some of
you guys are involved with that,
Purdue's
got a lot of entrepreneurial things going
on, but we've
got to keep scaffolding not only the
capital, the
mentorship, the good guidance around
these kids who
often have good ideas, and the
interesting
thing, of course, today is it's not that
you've got
to go build a hundred million dollar
bricks factory
to get into a business or something,
you can source
lots of what you may be doing through
cloud and through
other sorts of arrangements, as has
been described
here, so I do think these are all
related pieces
to making this work in the state.
LANGELLIER: Which is a good point because
I've had
several CIOs reference that over time how
many more CIOs
there used to be because there are so
many more corporations
that were headquartered here
and they've
since consolidated or been acquired and
so as a result
there aren't as many corporations, so
as we're
trying to recruit for big companies we're
not going to
have as many of them located here to
recruit for
it.
WHEELER: And if I can make one other point
on that, what's
changed in our IT labor market and my
peers at the
table will probably agree, we run a big
IT shop, we've
got a lot of skills, we've got really
good retention
and that's worked really well because
when we're
being recruited against coastal firms on
cost of living
and some of the other challenges we
were able to
prevail in some of the things that are
fantastic in
the midwest, but increasingly we're
hearing folks
from the coast just say "Oh, we don't
care, just sit
in Bloomington, sit in South Bend, you
can telecommute
and we'll up your salary by some huge
amount of money,"
so we've got to grow more here in
the state because
we're not going to grow an ocean or
mountains, as
was recently said, but the labor battle
in these technical
fields is really an arm's race
right now.
KOPP: Yeah, if I could add to that,
Indianapolis
is the fourth city I've lived in,
actually, so
I can brag on the city a little bit. I
just moved here
almost four years ago and what I
think makes
the tech community here so special is
everybody who's
here in the room, I can tell you from
being on the
west coast and being on the east coast
you don't
find a group of people who want to come
together and
sincerely and genuinely help one
another, you
really don't see that. I hope you guys
have had a chance
to travel and get out and about,
it's much
more of a cut-throat startup mentality than
it is everybody
come together and the sum is greater
than each one
of the parts, and there's a saying for
whoever has
much more will be given and from that
person more
will be required and I really believe
that, and if
you look at the people in this room,
there's
Mark Hill who's here, there's so many of the
successful kind
of tech luminaries who really helped
get this ecosystem
jump-started, they continue to
give back and
then others have continued to give back
and the ecosystem
is really built on itself far more
than any other
software ecosystem that I've seen
anywhere in
the country.
O'MALLEY: Well, super! I've heard that
quite a bit
lately, talk about that cooperativeness,
willing to work
with each other here in this market
and that's
an interesting distinction. Just to take
some questions
from the audience, someone asks what
are your thoughts
on the Yahoo and Best Buy
announcements
eliminating or dramatically curtailing
working from
home? Has anybody thought about that?
BRAR: A couple times. I think that you
can't hammer-nail
the issue, right, so I think from
my perspective
I respect what Marissa is trying to
do, I think
it's "Hey, the company has some chance of
going out of
business," right, and so just
strategically
if we keep doing the same thing over
and over and
over again you're probably going to have
a pretty predictable
result. So it's hard shaking
things up and
really trying to get after it and
tightening down
and maybe not doing everything the
same way as
they've done in the last decade, it's
hard to argue
that it's not worth some risk, right,
so I think it's
a company-by-company thing. We have
a very flexible
work model at Apparatus but we're
actually not
huge proponents of working from home by
kind of default,
right, so it's a case-by-case basis,
and for us it's
about company building and culture
building as
we go from 10, 20, 50 to 140 employees
and we want
to keep a very loose, kind of not policy-
ridden culture
and that's a way for us and we don't
like to have
a lot of meetings and there's tons of
these micro
meetings happening all day long and
always around
people's desks, and so for us, for
example, it's
not the best fit model for us and we'll
continue to
augment and accent kind of our core
culture with
specific cases where work from home
makes sense,
and certainly if employees work from
home a day or
two it's actually no problem, but I
actually applaud
Marissa for what she's trying to do,
I think trying
to really reshape the culture at Yahoo
and drive dramatically
different results than they
have the last
decade is something that's hard to
argue with from
my perspective.
VANCE: I would agree with that. I think
that a lot of
times we focus on people working from
home and think
that it's about productivity in that
environment.
We have very measurable solutions that
we use to measure
our at-home people versus our
not-at-home
people. In terms of production, their
production at
times can actually be higher in overall
volume, which
is great to see, but what we feel we
lose a little
bit in that process is the creativity
and the shared
knowledge and being able to -- We talk
in our environment
about if we're reliant on one
person to always
have the right idea or the answer
we're going
to be pretty limited pretty quickly, so
the fact that
we have other individuals working
together, even
though actually the production might
be a little
higher, the at-home environment for us in
terms of calls
per hour and all of that, the actual
conversion is
higher for people in the office versus
at home because
they have other people to brainstorm
with and share
ideas with.
AQUILANO: I think it's more important for
smaller companies
to all be in the same room, it
matters, and
when they propose this big virtual
structure we
say "You're going to have to prove to us
that it works,
otherwise the default is let's try to
be in the same
room."
O'MALLEY: Good discussion. Here's a
question, interesting
question. The city of
Chattanooga,
which to most of us is better known for
the headquarters
of the Moon Pie factory, Chattanooga
has invested
in a 600-acre section of their downtown
gigabit fiber
to every business and residence. They
are also paying
$10,000 to techs who relocate and buy
a home.
This person asks why can't we get gigabit
fiber two blocks
from the Circle and how are we
competing with
smaller cities that are making these
types of infrastructure
investments?
WHEELER: I might take a first bite at that
one. The
data are compelling. The United States is
falling further
and further behind leading nations
around the world
in these very questions, so let's
just agree to
the facts of the matter because this
really is true
and it varies some by city, so I think
the simplest
answer is the current approach is not
working and
that is just waiting for hopefully the
market and a
bunch of competing firms to solve what
is ultimately
a common infrastructure problem, so the
example that
you raised there, a city is trying to
take its destiny
in its hands by causing something to
happen with
public-private partnerships to move a
certain goal
forward, so I think one of the panelists
just said repeating
the same thing over and over may
not be the path
to success when the indicators aren't
moving in the
right direction and this may be the
decade that
it's time to rethink why the United
States is falling
down this list globally.
O'MALLEY: Great, thanks. Now here's a
question for
Tim. Tim, are you seeing a large
percentage of
people unsubscribing from e-mail lists
and is there
a noticeable retention rate based on an
age demographic?
KOPP: The answer is it depends. Any
marketing medium
is about relevancy and, guess what,
if you're
not sending relevant, timely messages that
improve somebody's
life you can sure bet you're going
to see a lot
of unsubscribes. So if you look at a
macro level,
no difference in trends. I think what
matters most
is the barrier for what is timely,
relevant communication
is higher than it's ever been
and if you're
a person who's sending out messages
every single
day, batch and blast same thing to
everybody, you
can sure bet unsubscribes are going to
go up because
other marketers have figured it out and
they're
really using data to drive relevancy. In
terms of if
we're setting trends, some trends with
e-mail, what
we're seeing is and what's interesting
is even if you
look at social networks, I would say
for some of
you guys using LinkedIn, Twitter,
Facebook, have
you noticed how much more they're
using e-mail?
The way that they're getting you into
the social network
and driving you in and around is
through e-mail,
which I find very ironic, so the more
social is growing,
the more it's actually helping
e-mail.
What we're finding is for college students
e-mail may not
be as high, it's the first time they
have to start
to do online bill payments and they get
some responsibility
in their life, that's when e-mail
really starts
to increase and play a role in their
life because
people don't want paper statements, they
don't want
all the paper in their lives, so then
they're
definitely signing up, they're part of these
e-mail programs,
but it all comes back to data-driven
relevancy, it
will be even more so in the future.
O'MALLEY: Sounds great. Well, here's a
question that
may interest Aman and Tim in
particular.
What advice would you give to an
organization
that's behind the game in digital
marketing to
get up to speed?
KOPP: Is that for a marketer or is that a
technology company?
O'MALLEY: Basically just an organization in
general, it
looks like here, that's kind of behind
the game in
digital marketing, is there any advice on
how to get started,
getting up to speed here?
KOPP: What I think is amazing is software as
a service in
many ways is the great equalizer. We
have built a
platform for 6000 customers and the same
thing that Microsoft
uses for their thousands of
users all around
the world is available for the pizza
shop and the
dry-cleaner next door and it's really
causing this
democratization of marketing, so we're
finding that
software as a service and technology is
this great equalizer,
and what I would say is disrupt
yourself, if
you see trends coming, disrupt yourself
before somebody
in your competitive set does it, move
swiftly, move
nimbly, use the technology tools that
are available
to everybody, and what we're finding
ironically is
it is the small and medium-size
business that
is driving, Aman, I think you hit on
this, that it's
not always, in fact it's not usually
the enterprise
who's driving the greatest amount of
innovation,
we're seeing this tremendous amount of
innovation come
from small and medium-size businesses
because I absolutely
believe the internet software as
a service solutions
are just driving this massive
democratization
of marketing.
O'MALLEY: Sounds good. Well, this question
is one that
a lot of folks probably think about as
they're
thinking about their next tech company and I
know that Mike
has seen a lot of promising companies.
Are there any
particular spaces in the tech realm
here that really
seem to have a lot of opportunity in
the next couple
of years? Mike has seen some of it
with the Mira
Awards candidates, for example.
LANGELLIER: Yeah, I think nationally we
started to see
a shift, especially in the last year,
last two years,
and I think that that actually plays
into our favor
a lot, so if you look nationally at
where venture
capital money is invested, for several
years that software
has been the lead category for
venture capital
investment and within that there was
a big focus
on consumer web and social web, so that
begets a lot
of investment, and, Don, please jump in
as well, but
that begot a lot of the investment in
Facebook, LinkedIn,
Zynga, Groupon, a lot of those
companies, and
there's a whole slew of startups that
were less on
the radar that were invested in because
they fit that
category. The problem is that category
is very geographically
concentrated, particularly on
the west coast,
so that did very well for California,
for example,
because I think they have two big
components,
one they have big capital that was
willing to invest
big dollars and to essentially
getting their
eyeballs and figuring out how to get
revenue later,
and then you also have these loud
speakers of
press machines like TechCrunch, Mashable,
ReadWrite Web,
all of them that within one click of a
blog post can
get distribution out to a million
people and I've
lived it firsthand that if you're not
in their backyard
geographically it's tough to get
them to pay
attention, they discount what we're doing
here, but what
we saw last year I think about with
the IPOs of
Zynga, IPOs of Facebook and the IPOs with
Groupon what
happened as a result of that, as well as
some of the
macro financial issues that happened,
we've realized
we've kind of hit a wall in a sense
of, one, we've
sort of gamefied people and socialized
people to a
limit where we're starting to realize
there's
a limit to where things are ready to go and
then also the
degree that we're willing to invest
into business
models that we aren't really sure
they're
tried and true, so what we're starting to see
is much more
emphasis on investment and to software
as a service
platform and enterprise companies and
that's much
more of our strong suit and I think also
there's
a lot more emphasis within that, if you break
down that category,
into the area where technology
intersects other
areas to places like health IT, Don
mentioned that
earlier, places like marketing
technology,
places like energy and tech, places even
like the intersection
of manufacturing, so places
like robotics.
We can only innovate on the best way
to aggregate
our social networking stream so many
times before
it gets passe, and I think now the big
challenge, and
there was a lot of talk about this in
DC as well,
there are certainly software as a service
plays and platform
kind of enterprise software play
which suit us
well here, but some of these kind of
innovations
at the intersection of health,
intersection
of energy and intersection of
manufacturing,
for example, they're big capital plays
and there's
concern about how are we going to fund
big kind of
biotech investments, for example, but
there's
a lot of opportunity for us here because
enterprise techs,
software as a service is what we do
and we also
have key asset investments in things like
bio and things
like energy and things like advanced
manufacturing
and logistics and others that we just
have to find
those areas of opportunity where tech
intersects those
industries.
O'MALLEY: That's good. Thanks, Mike. What
engagements
have occurred with tech leadership and
local government
to assist with attracting new
talent, in other
words whether it's being talked
about in the
context of mass transit or other civic
planning?
In other words, I guess what they're
saying here
is is there something that you're trying
to promote that
could help attract new talent here?
For example,
I don't know if TechPoint is supporting
mass transit
expansion, for example.
LANGELLIER: I think there's a lot of debate
about the mass
transit, I think that there's
certainly, especially
if they're trying to attract
people from
other cities where mass transit is sort
of a natural
way of life, I think that that's very,
very important.
I think our biggest area of
opportunity,
though, is in the workforce for a couple
of different
reasons. I think that some stats people
may not be aware
of is that Indiana is second in the
country in attracting
out-of-state students, the
problem is 80
percent turn around and leave, and then
compound that
with a third of the students that
actually start
here and go to school here leave as
well.
So I think the greatest area of opportunity --
A portion of
retention -- I think it's good for
people to go
out and get new experiences, but I think
the thing we
can be more bold and deliberate about,
especially as
we live in this kind of economy where
the assets that
we have here are increasingly
desirable, we
need to be more bold and aggressive
about ex pat
projects, about repatriating people who
have gone out
and come back. Now, if you looked at
the Pew Research
numbers on the sequester impact
again, you can
say what you want about what the
impact is really
going to be, but states like
California,
California is going to be hit the
hardest, so
there's a lot of kind of disruption
happening in
other parts of the country and with
people that
have Indiana roots and have had disparate
experiences,
that can be very valuable back here and
I think we need
to be really aggressive about going
back and getting
them. Obviously things like mass
transit need
to be on our scorecard of things that we
have to have
an answer for, but I think more than
anything it's
just aiming the effort at initiatives
like that to
get the people here that we need.
WHEELER: Well, I'd like to follow up on that
because I was
speaking with some tech leaders from
some of the
old firms out in the valley who really
just have employee
fatigue of people rotating through
jobs out there
and the turnover being very high, also
the cost and
such. I do think there are serious
opportunities
with some of those firms for location
in the midwest,
particularly, you know, one of the
offers we've
got from Bloomington is a very strong
pipeline of
folks coming out and a lot of these
Indiana students
don't want to leave the state, but
we've got
to give them a means to stay in the state.
LANGELLIER: Scott's talked about with the
(inaudible)
acquisition you guys got to see both
sides of having
employees in multiple geographies.
KOPP: Yeah, it's fascinating. Connections
is the big user
conference we do here, so we get to
bring people
in from all over the world. I swear
they believe
we're going to pick them up on tractors
before they
really have a chance to experience the
city, and, you
know, the truth is it is a phenomenal
city, and kind
of classic marketing speak, I don't
know that we've
got a repeat problem, it's kind of a
trial problem,
we've got to get enough people here
and then once
they are here I think more of them will
stick around,
particularly a lot of it's tied to life
stage and a
lot of what sort of TechPoint started to
do around this
but particularly around the moments
where family
becomes more important and raising a
family, I think
that's where kind of returning back
to the midwest
is really important and we have got
some of the
best marketing and software executives
from around
the world to come back and kind of be a
part of what's
happening here.
AQUILANO: Right, and this Orr Fellowship
Program is just
one part of the solution as well, in
other words
take the best and the brightest students
that are recent
graduates, give them a great
entrepreneurial
experience by sort of member
organizations,
we've had a couple and this was
something started
early on by the Angie's List folks
and some other
community leaders and the more things
we can do like
this to actually keep folks here that
want to be part
of our ecosystem and to get people
back, kind of
have people come in once they've left.
O'MALLEY: Very good. I hear that
Chattanooga
is kidnapping tech workers from
California.
We have time for one final question, and
does anybody
have any thoughts about how should
companies know
when to outsource? Is there a time
when that can
be helpful?
VANCE: Well, I do. Yeah, I think one of the
things that
-- I heard a staggering statistic
recently from
an individual that is on an inside
sales team,
because obviously I want to talk about
inside sales
and lead generation in terms of
outsourcing,
but one of the things that she had
shared being
part of that team seven years with the
company that
she was at is that she had had 11
managers during
those seven years, so that's pretty
staggering,
it's surprising she was still there for
seven years,
frankly, and so I think one of the
challenges is
looking at core competency, what am I
best at, making
sure that I stay focused on the
things that
I'm best at, making sure that I truly
consider all
costs when evaluating those decisions
and I think
what we tend to find in working with our
clients is that
you intend to just look at hourly and
benefits, you
forget about things like productivity,
attrition, you
know, if I have a full-time employee,
what percentage
of their time is actually spent doing
the job that
I'm asking them to do versus working in
a billable environment,
I feel that's critical in any
role but it
definitely plays a part in the lead
generation inside
sales capacity, and then what type
of urgency do
I have to market and do I have time to
work to establish
a best practice or do I need to get
to market quickly
and effectively with proven best
practice and
a proven model and then can I work with
a firm in any
environment or any role that can
actually maybe
work on an outsource basis to
establish the
benchmark and establish the best
practice but
ultimately allow us to bring it inhouse
once we do establish
what's working and we start to
gain a little
bit of core competency.
AQUILANO: I would say for most of our
smaller companies
we tell them to outsource
everything except
what's very, very core to your
business and,
frankly, most of our companies use one
of Jenny's
companies as it is, so that's our
perspective,
it's really important when you're young
and trying to
grow fast.
BRAR: For larger companies the one thing I'd
add is if you're
not managing on your scorecard as an
executive of
a large company you probably really
don't care
about it and so it's a focus question and
one trap we
can see larger companies fall into is
that it becomes
kind of purely a cost conversation
and that really
isn't a winning conversation for most
outsourcers,
it needs to be about their strategic
focus and about
what they want to focus on and not
focus on and
those are the clients that we certainly
have the most
success with. Selling on the cost
piece alone
for a large firm can sometimes be a
recipe for disaster,
quite frankly. So if it's not
on that senior
leadership's scorecard for a large
firm, it's
probably being ignored, so why not have
somebody care
for it is generally the way we approach
it.
WHEELER: So I'd add one note of caution. In
the IT space
there's a pretty clear yo-yo pattern
over the decades
of outsourcing, insourcing,
complexity and
back, you know, GM's completely
rebuilding an
insourced IT capability and there are
two Nobel Prizes
in economics that have already been
awarded for
this very classic question, I'd encourage
us not to ignore
some of the wisdom.
O'MALLEY: Okay.
on Facebook & Twitter
Back to Top
IBJ Conversations
0 Comments
Add Comment