Sramana: In the 1M/1M program we teach company and product positioning religiously. Our mantra is to not spray and pray.
Dean Stoecker: I think one of the key lessons for entrepreneurs is to be willing to say no. I can remember listening to my father when he was a kid, and he frequently told people no. If he didn’t, he was afraid that he would have gone into a dimension where he would be undercapitalized or under experienced to succeed.
Sramana: You also don’t get anything you can reference in that scenario. You don’t get leverage from those customers.
Dean Stoecker: We had been in business for about four months, and we were asked to build an analytics application by a well-known firm. They wanted it to be work-for-hire. It was in the vein of what we were planning on designing as a software product on our own. It was a $300,000 deal, but we declined the deal because that firm would have wanted to own the IP to the software. We would have won the deal and we passed. The interesting thing is that the company failed at building that tool set themselves, and they have since become a customer.
Sramana: We have a lot of entrepreneurs in our program who struggle for revenue. They try to make ends meet, so they take projects here, there and everywhere. They are not willing to say no. This is one of the big dichotomies we see a lot with early stage entrepreneurs. You are wise to point out that by saying no, you will build a more robust company. You found a sweet spot in real estate and media with a focus on geographic analytics.
Dean Stoecker: We were really good at managing geographically organized content. Anyone who had applications that were predominantly based on the ability to retrieve that information from a tailored, purpose-built analytics engine used our product. We were only 5% of what we wanted to be at that time, but it was enough to get us going and show that we could be successful.
Sramana: Can you talk to me about your early customer acquisition strategy? What kind of programs did you run? Once you zeroed in on a niche, how did you build it?
Dean Stoecker: Entrepreneurs might get blinded by the excitement of starting their own business. They might think that if you build something, then somebody might buy it. That only works if you have tons of time and money, and even then the failure [rate] is high.
For the first six or seven years we wrote our own brochures. As owners, we were always selling. We focused on demonstrating the product. It was all about hands on, not pretty pieces of paper.
Sramana: How did you do lead generation?
Dean Stoecker: The timing of the Internet was perfect for us. We knew we could generate leads on the web if we had a freemium model. We would not have to spend a bunch of money doing demand generation. Over the years, from January 1997, we rolled out a free FreeDemographics.com website which was built specifically to generate leads. From the day we launched, we were generating 200 leads per day.