BK: Congratulations on the venture funding. Tell me, what does SME Global Solutions do, and how does your WebVisible fit into the local search market?
KM: Thank you. We're fortunate to be working with such a reputable firm in Redpoint. They've proven to be a great partner.
SME Global Solutions and the WebVisible service allow large companies such as Dex Media and Knight Ridder to sell interactive media products to their customer base…easily and on a scale basis. We provide a turn-key solution beginning with integration into their legacy systems, order procurement, media management, fulfillment, optimization and analytics. Additionally, we support our customer's sales channels by providing market strategies, training, sales merchandising and in-field sales rep support. Our company offers banner and sponsorship products, eCRM, call tracking and cost-per-call and, of course, the ever popular local search, where we currently have over 10,000 individual customers under management.
BK: Why the focus on local search, and what's the appeal of this market?
KM: Search has become ubiquitous, "Google-it" a part of our vernacular. Local businesses total over 23 million worldwide. Do the math on addressable market, combine the terms "local" and "search," and you find a veritable feeding frenzy. The search engine's main focus is to provide a compelling end-user experience. The challenge is to serve profound results when a consumer searches for "emergency plumber, burst pipe, Irvine, California." Rather than the usual Roto Rooter and George Brazil, Google, Yahoo, MSN and others are looking for truly local merchants- "Bob's Plumbing Service, Serving Orange County for 20 years." Merchants want the extended reach and distribution and access to the search demographics. Search Engines want compelling content and revenue and national marketers are a limited and regurgitated gene pool of availability and revenue. The US local space produces over $90 billion in yellow pages, newspaper, direct mail and other vehicles with a growth rate of 0%-6%. Compare that to a $5 billion search market with 35% growth rate and that equals opportunity. The true challenge is bridging the delta between merchant and consumer and we believe leveraging the existing sales channels of our customers is the shortest path.
BK: It seems like there are lots of startups trying to make a play for this market. How are you different from the many local search upstarts that are popping up?
KM: This month marks the 4th anniversary of our company. We've financially and emotionally left our start-up days behind and will achieve 200% growth over 2004. I believe we are uniquely qualified to address the local space due to our domain expertise. We know local merchant mentality, we know local sales channels and we understand scale. In a market such as Search, the products are fluid and still evolving. The key is to concentrate on sustainable products and platform. For instance, in Yellow Pages, merchants buy one-year products, billed monthly on their phone bills and evenly distributed. Our local search products can emulate their core product. Utilizing proprietary algorithms, we can systematically monitor progress and pacing of thousands of media buys, providing the merchant continual presence and predictable billing. However, the true key is knowing most merchants do not BUY media, they are SOLD media. Understanding the sales channel is paramount to success. Local, therefore is not a fad for us, it is our living.
BK: What's your background, and how did you decide to start SME?
KM: Our company's leadership has an extensive history in offline and online experience in the local space…over 150 years combined with companies such as Pacific Bell, GTE, SBC, BellSouth and Dex. We built the original Internet Yellow Pages sites for the RBOC community and were the pioneers of selling interactive products through traditional print sales channels. This year marks my 20th anniversary in local. I started my career selling Yellow Pages for GTE, worked in marketing, management, product development, and exited SBC as VP of Interactive Sales. I believe it takes sitting on the other side of the desk to recognize what a vendor such as WebVisible needs for success. We recognize companies with scale, leveraged sales channels require new interactive products that provide low barrier to entry, low risk, high margins and predictable COGS…all while providing compelling top line revenue and net income. We handle business development, product marketing, project management, integration, and support. We provide a platform that is scalable and sustainable with the analytics needed to support and manage a system-wide product roll-out. We become a true value-add to their core teams without cannibalizing their core products…a very sticky vendor!
BK: Has it been difficult developing your product and getting customers signed on?
KM: We're pretty well known in the Telco community therefore securing the proverbial "first meet" is a straight line. Working with large companies, the business development cycle is slow, the integration and product strategies carefully orchestrated and the media management challenging. The good news is once sales begin a flywheel effect occurs and breeds a strong, annuity based model. The difficulty always remains in building a stable and scalable platform capable of handling thousands of media buys from hundreds of resellers on thousands of media outlets. We call our software "Geneva"- we wanted to build a Switzerland technology that would serve any master and distribute to any media. It has to remain agnostic as advertising always follows audience. Today we see the bulk of internet traffic on the major search engines but tomorrow we may see a sea change to blogs and community sites. We therefore made a conscious decision to secure our Series A with Redpoint to further create compelling IP and maintain our first mover advantage. Our ultimate goal is to be a viable, local transaction platform, follow that audience and maintain our reputation of superior customer service. Yes, it has been difficult but sleep is highly over rated anyway!