Last week, Los Angeles-based Magnify360 (www.magnify360.com) raised $2.5M in a venture funding round. We spoke with Olivier Chaine, the firm's CEO and Founder, along with investor Mark Sugarman of MHS Capital, about the company and what it's trying to do.
For folks who aren't familiar with Magnify360, what do you do?
Olivier Chaine: Our platform is the leading content personalization and optimization platform. What that means, is that for every single person that comes onto a web site, we profile them, understand who they are, and deliver the most targeted experience possible.
When you say your providing a personalized experience, what does that look like to a customer?
Olivier Chaine: To a user, the version of the web site is personalized so that it effectively speaks to them. They don't realize it, but in the background, Magnify360 is testing hundreds of variations of layouts, content, offers, all geared toward an individual's personal profile. It determines whether they are ready to buy, or early in the education process; whether they are a visual, or analytical person; and more. We're taking variation of content and offers, and coming up with the best one for each person.
It sounds a bit like a souped up version of A/B testing?
Olivier Chaine: Exactly, we're several generations ahead, and quickly do A/B and multivariate testing--not just with content, and offers, but with the biggest variable, which are the people coming into the site. Even though we might all be in high tech, we all have different backgrounds, and what we're looking for at a particular time. We have a proprietary algorithm which targets the site for both of us, so that we're both more satisfied and likely to convert.
What kinds of companies use your products?
Olivier Chaine: We've got a very wide range of customers, including companies like Intuit and Ctrix, many companies in the high tech space, and lots of financial services companies--those primarily targeted at lead generation as well as e-commerce. Based on my experience at LowerMyBills, I realized that there were not any good lead generation tools or platforms, and took the early lead to build out capabilities to optimize that very effectively. We are also growing into other spaces, such as e-commerce and publishing, as those areas mature.
Speaking of LowerMyBills, tell us a bit about your experience there?
Olivier Chaine: It's a long story. I joined LowerMyBills right at the beginning, on their executive management team, as they closed a Series A. I was responsible for conversion optimization of their web operations. That included analytics and performance and optimization of their web site. In doing so, I got a really good understanding of how marketing spend turns into dollars. As a result of that understanding, I realized that what it took to really make a direct marketing company profitable, is by looking at every individual visitor. That's exactly what made them successful or not, and really was the core infrastructure that made LowerMyBills' success possible, especially at a time with no money at the bottom of the crash. So, the result of my experience at LowerMyBills, and also other projects like Ticketmaster and Fox Sports, made me realize the combination of multivariate testing and behavioral targeting was the next revolution in the web site experience. It's not static websites, and not a single version of a web site--it's personalized and dynamic for them.
Why is there a need for your products, with all the web optimization players already out there?
Olivier Chaine: We definitely spend a lot of time keeping a pulse on the industry, and understanding who is out there, and looking at what they do well or not. The challenge with the web optimization folks, is they are trying to just focus on the web sites. If you only focus on the web site, rather than visitors, it's the same problem as being product oriented rather than customer centric. By being customer centric, we've managed to provide a huge, huge lift for our clients. It's something like 300 to 500 percent lift . We have clients who have dropped their CPA (ed's note: cost per acquisition) by over 70%. It makes sense, and it really comes down to people. It's understanding the people coming to your site, and what they're looking for. Right now, we're the only ones doing that. There are plenty of other folks helping clients to optimize using A/B testing and multivariate testing -- you can even get that free from Google -- but they all have a ways to go to where we are.
Is this software that you have to install, or how does this integrate with a web site?
Olivier Chaine: Its software as a service. We have a hosted platform that we manage, with a giant data warehouse and a huge number of number crunching magazines. We've made it very easy to plug in for clients. It's just one or two lines of code on your web site, and there's no impact on performance or speed on the web site. But, it has a huge positive impact on ROI. Lots of our clients also will work with us on paid search campaigns, display ad campaigns, as well as for organic traffic to their web site. We make it very easy to interface with, which allows our clients to manage the variations directly on the back end. You can see the performance and numbers that make sense, based on behavioral profiles, not just based on page views or dropoffs.
How did Magnify360 connect with MHS Capital?
Mark Sugarman: There were a couple of things. One, was that with our technology investments we like to see an organic path of growth. Olivier had spotted a problem found some initial pilot customers, and worked to perfect the solution. We saw the tremendous value that delivers to customers, and the impact on financials--both top and bottom line. It was really the impact of the solution, and quality of the team, as well as the ability to scale rapidly in a space where there is tremendous value to be unlocked. For me, the best companies are very metrics oriented, but when they do optimization and A/B testing, they treat everyone as one visitors and optimize to just one profile. What Magnify360 does is enables them to use statistical models to predict the model for individual users. For me, that's a very significant breakthrough. It shows up in a delta with what people can do with A/B testing and what they can do with Magnify360.
Olivier Chaine: It was very important for me to have someone who understood the vision, but was also positive and constructive in building this out. We evaluated many different firms, and saw what Mark has developed, and his reputation at the end of the day made us go with MHS Capital. .
So what's this funding going to go towards?
Olivier Chaine: It's primarily for growth. We've had a very successful last couple of years, bootstrapping and getting it to profitability, and the market is taking off. We've got great quality people, and primarily are recruiting on sales and marketing, and investing in our infrastructure and technology, to make sure we're ahead of the curve. We've got 35 people and at least six open positions, but we need more people, and better people, so we can grow as fast as possible--that's our biggest challenge today.