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Interview with Peter Kim, CEO of Qualte

Peter Kim is CEO of Qualte (www.qualte.com), a Los Angeles-based provider of web-based customer service. I spoke with him to get an idea of how people are making their businesses work, despite the economic slowdown and lack of investment.

BK: Tell me a little bit about Qualte and its services-- who do you serve, and what's your business model?

PK: Qualte is a leading provider of web-based customer service solutions that enable any size business from small home-based businesses to large multi-national corporation to very quickly provide critical customer support functions such as customer "self-help" and call center capabilities at a cost point to fit any size budget. Our applications significantly reduce customer turn-over and decrease operating costs while improving customer service quality and responsiveness. Unlike many other companies in our field, we cater specifically to small and medium size companies by designing solutions that need their specific needs. Small/medium size companies need solutions that are deployed very quickly and with minimal expense but still don't skimp on functionality. Using Qualte's cutting-edge web technology, we are able to deliver our clients an extremely robust solution that can be deployed in a matter of hours to days, not weeks to months and does not require any software or hardware purchases. We bill our clients on a pay as you go monthly basis and as a result, they realize immediate return on investment.

BK: Who are some of your customers, and how are they using your services?

PK: Our clients encompass virtually every industry and vertical from entertainment to ecommerce to manufacturing to biotech to software and internet companies, traditional brick and mortar as well as web-based businesses. Since each has their own unique needs, we designed our systems to be flexible enough to address a wide range of business pains. For example, the E! Entertainment Network, the #1 entertainment website in the country, was absolutely inundated with thousands of emails and phone calls per day but really didn't have the customer service staff or infrastructure to handle such volumes. They turned to Qualte for our on-line "self-help" applications that allow their viewers to find answers to their own questions. As a result, the number of questions that have to be answered manually has gone down by over 80%. Another very different client, Starving Students Moving Co., is using our system to power their internal claim processing system. Trying to coordinate the information flow between the various departments and local offices (39 local offices) whose participation was required in the handling of each claim was just too much to ask of their old paper-based claims system. With Qualte, all claim information including photos, forms, receipts, notes, etc. are stored as an electronic file that can be accessed from any of their locations and by any of their authorized staff and for the first time their customers can file a claim on-line. An example of a client that has very general customer service needs is on-line photo processor Pictage, Inc. They use web "self-help" to empower their customers to find answers on their own but also make full use of the system's email management, problem ticketing, live chat and call center functions to provide comprehensive service regardless of the channel of communication. Incidentally, these are all local Southern California companies but Qualte works with companies all over the world.

BK: What's the story behind how the company was founded?

PK: Qualte's history is an interesting one. In 1999, Qualte's founder, Dr. Hiri Etessami, established MyMoneysWorth.com (MMW) with the original vision of offering consumers an on-line means of resolving their problems or complaints with specific companies. To execute Dr. Etessami's vision, MMW developed web-based software to streamline the problem reporting and resolution process. During the next several months, MMW.com attracted hundreds of thousands of visitors, received hundreds of complaints against companies and was featured in several publications including The Washington Post, Brand Week and CNNfn. The feedback gathered from both consumers and companies was invaluable in bringing about the next evolution of the company from MMW to Qualte. PK: Qualte's history is an interesting one. In 1999, Qualte's founder, Dr. Hiri Etessami, established MyMoneysWorth.com (MMW) with the original vision of offering consumers an on-line means of resolving their problems or complaints with specific companies. To execute Dr. Etessami's vision, MMW developed web-based software to streamline the problem reporting and resolution process. During the next several months, MMW.com attracted hundreds of thousands of visitors, received hundreds of complaints against companies and was featured in several publications including The Washington Post, Brand Week and CNNfn. The feedback gathered from both consumers and companies was invaluable in bringing about the next evolution of the company from MMW to Qualte.

In October 2000, the concept for Qualte was born. After hundreds of consumer and company interactions, it was observed that consumers' first instinct and preference is to get resolution to a problem or question directly from the company in question and similarly the first preference for a company is to resolve a consumer's problem or question internally before it reaches a third party intermediary like MMW. Upon further market research, virtually no providers of customer service software to small/medium size businesses were found to exist. From that point forward, all product development, business development and marketing efforts shifted to productizing and expanding on the existing MMW problem resolution software to be marketed as a turn-key customer service solution for small/medium size companies. The resulting product line and web site was named Qualti. Since that day, developing Qualti's product set and customer base have been the sole focus of the Qualti staff.

BK: How many employees do you have, and who are your financial backers?

PK: Because of our innovative technology and business model, Qualte does not require a large staff to execute our business plans. Qualte is currently 18 employees. Qualte also works with a team of talented outside consultants on special projects. Since Qualte did not really get started till after the technology bubble burst in mid 2000, we have experienced a much more organic, natural growth, one base on actual customers and revenue as opposed to the type of artificial growth seen with many companies that received large sums of venture capital. Qualte does have investors but other than initial seed capital from mostly prominent local business people, doctors and lawyers, Qualte is self-sustaining.

BK: It seems to me that ASPs have faced some scrutiny lately with the Internet bust--what kind of concerns do your customers have with your hosted services, and how do you address those?

PK: As a result of many, very well published .com failures, some companies are wary about working with Internet based companies. They are concerned about data security, guaranteed uptime and most importantly company stability. They want to know that you will be around to provide them service for many years to come. We address these concerns by first and foremost acknowledging that these are very valid concerns and not simply brushing them aside. Secondly we are very organized and systematic in the way we address their concerns, backing up our assertions in writing and with penalties for not delivering. When it comes to data security, we go over our security architecture and show them that we use the latest security protocols and their information is probably more secure with us than with them. As for uptime, we show them our uptime record and our uptime guarantee of 99.9% and attach monetary penalties if we fail to maintain our uptime guarantee. When it comes to financial stability since we are a private companies we do disclose our actual finances but we place our technology in escrow for the client with a clause in the contract granting them a non-transferable license to use the software in perpetuity if something should happen to Qualte. The most powerful tool we have in putting potential clients at ease is having them speak with our other clients. We simply give them a list of our existing clients and have them pick the ones they wish to speak with. We have such phenomenal relationships with our clients that I can refer a potential new client to virtually any of our exiting ones.

BK: What has been the biggest challenge you've faced with Qualte as a startup company?

PK: The post technology boom years (June 2000 . present) have been very challenging for start-ups and Qualte is no exception. The first thing to became very evident was that raising investment capital was going to be very difficult whereas during the boom years money seemed to fall out of the sky for anyone with a semi-coherent idea. The problem was really one of perception. Potential investors were turned off by the idea of investing in yet another start-up and similarly potential clients and partners were also turned off by the idea of working with a start-up when it seemed that another high profile start-up was going out of business on an almost daily basis. Ultimately we have been able to overcome the start-up stereotype by not acting like a start-up. We managed our growth, contained costs, selected companies to partner with very carefully and most importantly showed consistent forward progress through actual client acquisition and revenue growth.

BK: What's the biggest lesson you have learned in building your business?

PK: Qualte has been the most tremendous business learning experience of my life so I don.t know quite where to start. I guess the most important lesson I.ll take from Qualte is that it.s never too late to do things right. As a new company with a new business model we had to pretty much invent everything from our product to our pricing model to how to market without any real roadmap to follow. As a result we took a lot of wrong turns along the way. We survived those wrong turns by first not being so entrenched in our thinking or our path to change directions and secondly by learning from our mistakes. Mistakes are a valuable tool in business and Qualte would not be where it is today if it weren.t from the lessons learned from our mistakes.

BK: Thanks!


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