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Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 3)

Posted on Thursday, Sep 8th 2016

Sramana Mitra: What was the focus? What drove the process of determining where you were going to focus?

Guy Mucklow: One of the things that we had done in trying to get PCA off the ground was to look at a piece of technology, which actually is very prevalent in the UK, around capturing data really quickly and simply. In the UK market, we have the benefit of an incredibly grand database, which is managed by the Royal Mail for the purposes of improving the efficiency of the postal delivery service. It’s got 29 million records in it. It contains pretty much every single address that exists in the UK. It’s updated very regularly.

Most people in the UK know their postcode. From a single postcode, you can get to a list of 20 to 30 addresses. One of which is likely to be yours. The Royal Mail had recognized that there was a market opportunity for them in being able to license this data to a technology community to enable them to build services around provisioning that data. The data itself, as provided by the Royal Mail, comes in all shapes and sizes. It’s actually a real nightmare to deal with.

There is a technology base that is built up around this database. Britain leads the world in it. We’ve been playing with this kind of data for 40 odd years. There were some established players in the market when we started looking at it. One of them is a company called Quick Address System, which got acquired by Experian for about $150 million in 2005. They were very open about how successful they were in building that particular business. We saw that as a fantastic opportunity to relate that to where we had seen the opportunities of using the Internet.

We saw the Internet providing us with a fantastic opportunity to make massive improvements on the delivery process for data. If you bear it in mind, data is incredibly dynamic. In the case of Royal Mail’s database alone, there are over 5,000 changes to the 29 million records every day of the year. Roughly 10% of that database changes every year. That data was being burnt onto hard media as it was the most prevalent form in that particular time. In our particular market, there’s a much greater need to have something that was far more dynamic. If you considered burning data onto CD-ROM, it’s a really expensive process. By the time you receive the data, it’s out of date.

More than that, it requires someone at the other end to do something about it. In most cases, the person who’s receiving that data will, invariably, sit on it and file it away to update it at some point in the future. Spotting the opportunity to provide a centrally managed service that was incredibly easy for different businesses to hook into to enable them to get access without them having to lift a finger was where we saw the major opportunity.

This is a major learning of mine and something I would impress upon anyone wishing to start up a business. Don’t look to reinvent the wheel. Reinventing anything involves massive cost. You’re taking people from an established way of doing things to something that is completely different. It’s all about smoothing the process. It’s much easier to improve the product or process and streamline the wheel rather than change it into something else.

Sramana Mitra: Who were the customers that you were going after at this point? When you decided that this was going to be the focus, which customers would then help you validate the assumption that you were hanging your hat on?

Guy Mucklow: Going back to the point that I made earlier, which was about timing and about doing things in a new way. If you’ve been used to receiving information on a CD-ROM for so long to suddenly ask someone to connect to that data via a 56k modem back in 2001 was quite a big ask. You might have used the Internet for a lot of personal stuff but, by and large, most business applications didn’t run over the web.

We had to think about how we could position the business to take advantage of an opportunity where some of those barriers to adoption were taken away. The main thing for us and one of the early critical success factors for us was seeing the opportunity of positioning our new web services in the e-commerce space. I guess we didn’t think about it in tremendous detail. If you’re online, you’re in an always-on environment anyway. You don’t have to worry so much about dial-up connections, trust and confidence in using the Internet for specific business applications.

What we hadn’t thought about to a large extent was that one of the major drivers of our technology is about removing a common frustration point in the checkout process. When you consider a typical checkout process, it’s about five minutes long. You’ve got two address forms, each of which is taking a minute or thereabout to complete. 40% of your time is taken up in completing your address details in a five-minute process. By taking that time away, we can streamline the process and get people through it far more quickly. That was probably one of the biggest drivers for the adoption of our service in the early days.

In terms of validating, I guess it was also about having, in effect, a highly visible service too. One of the things we did was, we had a ‘Powered by’ byline that was visible in the popup for capturing address. That was linked back to our website. Not all of our customers accepted that as the default way of doing things but enough did to enable us to capitalize on the highly visible presence that we had in a really important part of our customer’s checkout processes.

This segment is part 3 in the series : Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict
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