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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis Business Journal convened a panel of experts at its Technology Power Breakfast on March 7 to talk about industry issues including entrepreneurs, universities and online marketing.
Panel members included Don Aquilano, managing director, Allos Ventures LLC; Aman Brar, president, Apparatus Inc.; Tim Kopp, chief marketing officer, ExactTarget Inc.; Michael Langellier, CEO, TechPoint; Jenny Vance, president, LeadJen LLC; Brad Wheeler, vice president for IT and chief information officer, dean and professor, Indiana University.
The session was moderated by IBJ reporter Chris O'Malley.
The following is an unedited transcript of the discussion.
O'MALLEY: Well, first I'll ask a few
questions here of each panelist, and for those who
don't know, Mike was among a handful of local tech
leaders who recently visited the White House, I
believe it was the Startup America event. And, Mike,
could you tell us a couple of big takeaways you had
from your visit?
LANGELLIER: Sure. Good morning. Yeah, it
was a pleasure to be able to join a handful of folks
from Startup America. For those that aren't
familiar, Startup America is sponsored by the Case
Foundation and Kauffman Foundation and it's focused
on entrepreneurial growth and advocating for startups
across the country, so Michael Coffey from
DeveloperTown, developer Matt Hunckler, Kevin Hitchen
from Localstake, Dustin Sapp, I know Dustin and the
TinderBox guys are here today, we all got the
invitation to go out there, and it was eye-opening
from several different perspectives. I think Obama
must have a Washington, DC e-mail LISTSERV because
regardless of where we went, whether it was the Case
Foundation or the National Press Club or the White
House, everybody knew that there were two things that
they should talk about, one was immigration reform
and then the other one was also crowdfunding, so
obviously Localstake was very relevant to that
crowdfunding conversation and given some of our
international presence and our universities here
immigration reform was pertinent. But there are two
kind of main takeaways for me and for us, one is the
workforce challenge that we talk about a lot, that's
a nationwide problem and everybody was struggling
with ways to kind of grapple with that, and so that
was one keen highlight and obviously the immigration
reform conversation factored into that. One of the
interesting tidbits from that perspective of being
out in DC is, this was right before the sequester hit
and so regardless of what you believe about the
sequester or what's going to happen as a result of
the sequester, folks in DC were saying that they were
expecting a hundred thousand jobs to be lost, so it's
a really interesting dynamic when you think about the
workforce challenge but simultaneously you've got the
supply-demand problem with people trying to fill jobs
with high-skilled labor but also folks prospectively
losing jobs that are highly skilled and what's that
that going to mean for us and if there's opportunity
there for us. The other thing that was really
evident is that people don't know very much about
Indiana, surprisingly. We had the opportunity to
give a presentation to the CTO of the United States,
how about that for a title, and Todd Park, the head
of the SBA, head of patents of trademarks, a couple
special advisers for the Administration, and it's
surprising how little they know about what we do, and
so we went with a very deliberate, bold intention of
saying "These are the successes that we've had."
They don't know things like ExactTargets in
Indianapolis. A lot of them have heard of
ExactTarget because of the IPO and things like that.
They don't know that the most powerful supercomputer
in the world is at IU. You start to connect those
dots and then all of a sudden people start to get
more excited. But it's things like the Kauffman
Foundation research that found that only five other
metro areas have produced more Inc. 500 companies per
capita than Indianapolis has helped to get us up on
that map, but it was very evident that we need to do
more to get up on that national stage more
consistently, especially if we're fighting for talent
on a national basis.
O'MALLEY: Thanks. And, Mike, a lot of folks
were pleased when you were named CEO of TechPoint in
part because you have a pretty keen view of the
startup community. You can often be found hanging
out getting, liquored up on coffee at the Speak Easy,
for example. How does TechPoint ensure that these
distinct groups of young innovators and the
established companies remain engaged with each other
for their mutual benefit?
LANGELLIER: I think we're doing a lot of the
right things. I think places like Speak Easy, places
like Launch Fishers, I think though we live in an
increasingly virtual business economy, places like
that where people that are in similar phases in
business development, similar phases in life can get
together is very, very important. Obviously, capital
continues to be something that's talked about and
different views on that, and one interesting stat
from Karen Mills of the SBA was that I think it was
in the one to four million dollar investment range
over the past four years or so 70 percent of those
dollars nationwide have been invested in three
states, California, New York, and Massachusetts. So
I think it's obviously a combination of things, but I
think that the success that we've had and we've seen
in companies like ExactTarget, Interactive
Intelligence, Aprimo, Angie's List, you can go on
down the list, I think that begets people that are
more kind of emboldened and believe that they can
build things and do things, and then I think also
just creating places where entrepreneur folks can get
together and support each other is important.
O'MALLEY: Great! Thanks, Mike. Don, as we
mentioned, Allos just raised I think about 40 million
dollars for a new fund at a time when a lot of
venture money is backing out of the early stage tech
space. Can you give us a sense on how were you able
to achieve that and to what sorts of companies would
you like to consider as candidates?
AQUILANO: Good morning. The way we were
able to do it was we help fill a significant gap here
in Indiana and contiguous states. Mike talked about
all the things that are sort of going on locally that
are very compelling. We've got universities and
their incubator efforts, we've got organized angel
efforts that are seeding early stage companies, we
have TechPoint, we have Elevate, IEDC, we've got a
lot of great early stage activity. When those
companies that are deserving and needing capital to
go to that next stage, the early growth stage, they
have very few places to go and that's been sort of a
problem that has ebbed and flowed for the last decade
or so, and while it's a very difficult economy to
raise a fund, we went right to the successful tech
CEOs and entrepreneurs in the state who are keenly
aware of the issue and understand that there are
great companies. The ecosystem is vastly improving,
it has been for the last decade or so in Indiana, and
they stacked up their leadership to say "Yes, we want
to help raise this money," so rather than starting
with institutional funded funds, pension funds, we
went right to the folks who have built companies and
understand the gap, understand the need and
understand the opportunity that funding and fueling
great entrepreneurs can have in this state and that's
how we raised the fund. Our whole first closing was
largely high tech, high net worth individuals who
sort of lived in this ecosystem and understand the
opportunity. So it wasn't easy to raise the fund,
but we raised it in the right way. And then our
second fund we had institutional investors sort of
come alongside. The types of companies we're looking
for, there's a lot of entrepreneurs in this room who
sort of fill this need and there's a lot of people up
here who are certainly in the space that we target.
We love IT, we love software, we love software as a
service, we love technology-enabled business
services, health IT, health informatics, it's who we
are, it's what we've done, it's the types of folks
who have backed us, it's the type of companies we've
backed in the past. There's a lot of great activity
here in town, and we're a regional focus, we used to
be nationally focused, now we're regional. There's
so much going on here regionally that that's where
our focus is with Allos. So as soon as a company
sort of gets past that seed stage and is looking to
go to that next level, that's when we become very,
very interested and are passionate about backing
great entrepreneurs.
O'MALLEY: Great! If I'm an upstart sitting
out here and I've got some revenues, a pretty solid
stream of revenues coming in, what do I need as an
entrepreneur to know in terms of what kind of
companies are turn-offs and turn-ons, to use a
"Dating Game" term here, I guess, for the types of
companies that you find attractive?
LANGELLIER: You have to have beards.
AQUILANO: I was going to say, beards are
very helpful, that's right. Well, you know, we love
entrepreneurs who are keenly aware of their customer,
who have a passion for and they understand their
customer inside and out, understand how they make
decisions, what their pain point is and are building
a solution to solve it. That sort of passion, that
understanding, comes across very, very clearly. The
lack of it also comes across very, very clearly.
When it works, it's very contagious, you'll see us in
a room, we get excited, regardless of the space that
it's in, and people who can articulate their pitch,
if you will, their value proposition very quickly and
succinctly is also a big benefit, and you're also
sort of known by the company you keep. If you've got
a strong management team, strong board, strong people
who introduce the company to us, that's very
important. You know, the turn-offs, you know, if it
takes you five minutes to try to tell us what you do,
if you don't seem to have a great insight into your
customers, we joke, you know, if you say "This ain't
my first rodeo" a couple times, that probably turns
us off. If you use the word "conservative" too many
times, that's a red flag. If we see you parking in a
handicap spot, we're not going to fund you if that
happens, but those are the things. If we see you
passionate about it, we get passionate about it, we'd
love to join forces and help.
O'MALLEY: Well, that's great. Thanks, Don.
And just a reminder, if you do have a question we
certainly welcome the questions and any bad jokes you
may have we'll be happy to mention those as well.
Dr. Wheeler has developed a number of ways of
reducing IU's IT costs and these include a big
reduction in the cost of digital textbooks and Adobe
software licensing. Dr. Wheeler, can you tell us
about one of the most innovative arrangements your
department has implemented in recent years, maybe
something such as IU Anywhere, for example?
WHEELER: Yeah, I think there's two things
that popped to mind and they really go to the
entrepreneurial space here in the state of Indiana as
well. For any of you parents out there you may have
noticed after you pay for college there's this thing
called textbooks which seem to be quite a little
add-on for the experience. The shift to digital
really gave an opportunity to try to fix a pretty
dysfunctional market that wasn't working for
students, it wasn't working for parents. Actually,
it wasn't working for authors as well. So we jumped
out with an Indiana company, Courseload, Mickey
Levitan is here. Mickey and his company built some
software so that you can get the content in digitally
and students can annotate it and highlight, it runs
on notebooks and iPads and Droids and whatever, so
the technology was there, but how do you get the
content deals in place? Well, IU had used its
throw-weight of 110,000 students to go and negotiate
with Microsoft back in '98 and cut a deal to get all
of their software, all of our students on all
campuses to have access to all, practically, all of
the Microsoft software just as part of being a
student at IU and we were able to cut that deal with
Adobe finally as well. So what can we do with
textbooks? It's digital content. And I am happy to
announce that as of yesterday we finally got the last
big elephant in the fold with one of our big
publishers, we've now got over 70 percent of the
dollar volume of textbooks at IU in low cost
licensing deals for our students, but it took a long
time of negotiating and getting the whole ecosystem
put together in this path to digital, and I think
that it's one of the ways that technology can
directly impact the cost of attendance at
universities and that's a topic on all of our minds.
O'MALLEY: Super! Could you also point out
maybe some ways in which educational and research
outcomes have benefited from some of these concepts?
WHEELER: Absolutely. I was just on a call
yesterday about the life sciences and some big things
going on with what's happened with federal funding
and such and I'm very pleased to hear that two of our
leading scientists and researchers from the med
school are just singing praises of IU's IT
capabilities because so much of what they do is
modeling and simulation and big storage and working
in massive data-sets with researchers in their field
who may be in Australia or Europe or wherever, and as
many of you know, in April we'll be dedicating Big
Red II, it's the first university-owned one petaflop
supercomputer, which is just a machine that goes real
fast, but we dedicated Big Red about six years ago,
it's geriatric with a gray beard, beyond Michael's
beard, at this point in time. But by scale, Big Red
was about a 40 teraflops machine, this will be over a
thousand teraflops, and this infrastructure and our
approach to IT, which is a philosophy of abundance
within reason, so that our researchers, our students
have the tools they need, they're not rationed that
one school has great technology but the other school
on campus doesn't, or some graduate students have
access but some graduate students don't, and if we
want more beautiful paintings, don't ration the
canvas is part of the philosophy of making this
happen, and because of the scale of the university we
can roll up the resources and the people and support
around them to enable this environment for our
research to flourish.
O'MALLEY: Super! Thanks, thanks a lot.
Well, Tim, most are familiar with e-mail marketing
and ExactTarget, but you guys have been cultivating
some other forms of digital marketing in recent
years, it's been kind of hard to even keep up with.
Can you tell us a few of the innovations by
ExactTarget lately and how they're relevant to the
evolving digital marketing trends?
KOPP: Sure, I'd be happy to. Good morning
everybody, delighted to be here. We still love the
e-mail business, there is an incredible amount of
innovation happening within e-mail, but as we think
about kind of our space, we're increasingly media
agnostic and we're more focused on what the consumer
wants, so e-mail will continue to be the workhorse in
digital communications, no doubt about it. We kind
of view these three key pillars internally of e-mail
lives, e-mail is important today, it will continue to
be very important in the future, but there's no
question that cross-channel is the future and by
"cross-channel" we mean e-mail, mobile, social on the
web all coming together and data is king, so we talk
about those three pillars of e-mail lives, it's very
important, cross-channel will be the future. Data as
the foundation that drives all of that will really be
what propels cross-channel forward. The couple of
key innovations that we have really line up with
that, if you think about mobile and social, those are
probably the two areas that we've driven the most
innovation. First, if you take a look kind of at
these devices, just the mobile device has absolutely
changed the world and will continue to change the
world. Digital marketing, if you look at Gartner
Research, will now be a top three CEO imperative for
over 90 percent of CEOs over the next few years, so
really understanding digital marketing in the way
it's intersecting in the lives of consumers. So what
we've done is really built out it's all about meeting
consumers wherever they are, so from a mobile
standpoint how many of you guys — Well, I know
everybody's got a smartphone, but how many people
have more than 30 apps on their phone? That's most
of the room. So there's app fatigue. Many times
after you download an app, it has a lot of novelty
for the first few weeks, maybe the first few months,
we've developed a new capability we call MobilePush
and that is all about once you download the app, it's
a reengagement tool that sort of allows marketers to
prompt and push you back into the mobile app that
they've given a consumer, maybe they've downloaded
the first time, they've paid a bill, they've tried
something out, but now they need to go back and
continue to reengage, so MobilePush will be one big
one. The second one is just SMS technology, when
you're in store, in stadium, at event, the ability
sometimes at that point you will want to get into a
rich e-mail dialogue but it will be very easy to send
a text campaign, text in for more information and
send it through a short code that then allows a
marketer to drive in and have more rich conversation
after that. So those will probably be the two big
mobile ones, MobilePush and what we're doing in SMS.
From a social standpoint two really cool
technologies, our overall belief is that marketers
are having software fatigue a lot of times, you know,
adding a sixth software solution, a seventh software
solution, so we believe all of that is going to
converge into one singular piece of software and we
believe mobile and social will be important parts of
that. So the social we've launched a new capability
we call SocialEngage. SocialEngage is all about
driving customer service opportunities on Twitter and
helping to manage kind of that portal of the
real-time web that's happening on Twitter. So
imagine if you're Delta Airlines, your Starbucks,
you're a big distributed enterprise brand and you
need to take all the Tweets that are coming in,
distribute them to the brand managers and make sure
they get answered. We do that through the capability
that — You might remember we bought CoTweet a few
years ago, that has now morphed into this capability
we call SocialEngage. The next one will be
SocialPages and that allows marketers to engage a
consumer on Facebook and then drive them. The best
way that you can monetize social, quite honestly, is
get them to sign up for your e-mail list, so use
social as the point of engagement, grab your
consumers on Facebook and Twitter but then convert
them to your e-mail list so you can monetize it and
SocialPage is really a great tool that helps find
marketers on Facebook and quickly get them engaged
with e-mail, so those are probably a couple of the
key innovations.
O'MALLEY: Great! Well, Tim, how does a
company the size of ExactTarget, which is no small
startup anymore, how does it remain nimble enough to
quickly respond to competitors and to new marketing
channels? I mean it seems that every day there's
another firm that offers a subset of what you're
offering or some iteration of it.
KOPP: Definitely. First off, if you're not
in a space with a lot of competitors you should
probably worry because it means that you probably
don't have a viable market, so we think it's great
that there's so many competitors kind of gunning for
the space. If you look out over the next decade and
if you look at what's happened with ERP maybe a
couple decades ago and then CRM, the next 10 years is
going to be the decade of marketing, I think there's
no doubt about it, it is absolutely going to be the
decade of marketing, it's going to be the decade of
the CMO, and the CMO is absolutely in the best place
to drive the change management agenda for the CEO and
for the board. So I think what you're going to find
is this decade of marketing software as a service and
our plan and what we are today is the global
marketing software as a service leader. So we really
have used our size and scale to our advantage,
frankly. We have invested very aggressively back
into R&D. So the core of your question really comes
back to innovation, it's innovate or die, and if
you're not reinvesting quickly enough back into R&D
that's where companies end up becoming troubled. So
we're taking an incredible percentage of our top-line
revenues and investing them aggressively back into
R&D, almost 20 points of the top line going back into
R&D, which is about three times the size of our
nearest competitor, so we're investing very
aggressively back into R&D. The second thing we're
doing is creating an open platform. There is no
single software company that can solve all of their
consumers' problems, they're just too diverse, so
what we believe we need to do is open up our platform
and let many of the other leading software companies
across the city and across the world, for that
matter, build native applications on top of our
platform that complement what we're already doing.
So I think it comes back to using your scale, using
your size, not getting complacent, investing very
aggressively back into R&D but then also opening up a
platform to allow others to do massive development on
top of that for you.
O'MALLEY: Sounds good. Thanks, thanks, Tim.
Well, Aman, what has been driving your growth? In
fact, over breakfast you were talking about the need
to hire some more folks. What's been driving your
growth in recent years and how does that reflect the
needs or some of the changes in the market right now?
BRAR: First of all, good morning, beautiful
people, it's great to see you all. The last few
years have been a great ride for Apparatus. You
know, over the last decade the company just has had
great year after year amount of growth. A handful of
years ago it was a seven million dollar company,
we're exceeding 20 million in revenue now, we have
140 full-time employees with benefits all located in
downtown Indianapolis and we're thrilled to be part
of the technology story here and we're certainly
Indianapolis's next great technology company, so
we're certainly further behind where companies like
ExactTarget are now but we're trying to put the pedal
to the metal and I think we'll get there and we're
excited about it. The growth, it's been interesting,
solutions like Tim's solution, point solutions and IT
are actually simplifying in many ways because of
software as a service, but macro economically the
environment around information technology is actually
getting more complex, right, sometimes its prowess is
because of choice, sometimes it's because the
standard is now higher because of software as a
service, that "Hey, why is this a custom application,
why is it so long, why does it take so much care and
feeding?" and essentially while we design and
implement IT solutions the place we're crushing in
the marketplace is actually through the management of
those IT solutions, so we can create that same
experience that you might have with SaaS for a custom
application for your general IT infrastructure, and
what that's led to, and it is a secret here in
Indianapolis, is that the company at 14th and
Meridian is actually managing thousands and thousands
of servers globally for multinationals and for
startups right here out of Indianapolis and part of
the excitement of our own growth model is that we're
going to be an Indianapolis-centered company, so
while we recently hired a national sales executive
out of Atlanta as we continued our sales march
forward, our employee headcount, our growth is going
to be here in Indianapolis and that's how we continue
to scale, and then the other thing I'd mention is
that we have more clients, so what I mean by that is
it used to be it was the CIO, the director of
technology, certainly the CEO cared a little bit, but
the rise of the CMO, for example, has also been a
really interesting benefit for our company. There's
just a lot more interest in what's going on, revenue,
dashboarding and the CMO, quite frankly, is an
enormous client of IT services now, and if you kind
of read the intellectual press out there in IT you'll
see that recurring theme that the need for IT has
left just the realm of the CIO in business, so we're
real excited about our growth. You talk about the
talent, we were all talking about it at the table,
it's a fight every day to get the type of technology
talent that we need here in Indianapolis to continue
to grow. You know, we think a lot about — I was
thinking about Mike's comment about how people really
don't know and understand Indianapolis yet and it's
widely true and sometimes I think about it in the
sense that people don't remember successes around the
city very easily or around a person. I was an
offensive lineman, so I might have a hundred great
blocks in a game but if I give up the one sack from
the left side, everyone's going to remember that,
right, and what I would argue is while we certainly
are a very business-friendly state, you know,
businesses are made of people and the thing that
drives me crazy when we're out there recruiting at
colleges or trying to get an Indiana Hoosier back
from California to Indiana is that we forget in our
legislation that companies are made of people and
things like legislation that constitutionally ban gay
marriage, they're killing companies like us that need
to recruit all people, not just a certain segment of
America, we need everybody in America who want to
live in Indianapolis, we want Hoosiers that have
different life-styles to be here in Indianapolis, and
then I'll tell you what, we're hearing this at
college campuses and we're hearing it from Hoosiers
that might've left the state and I'm hearing it from
our peers in Mountainview and other places where I've
lived, the second that hits the news I get an e-mail
saying "There you guys go again," and to me I look at
that as we could be doing 99 things right but there's
a couple things that we're doing wrong, it's like
giving up that block from the left side, that's what
everybody remembers, and I really would just urge as
far as our recruiting efforts are concerned, let's
not make it any harder than it already is because we
can't build mountains and oceans here but we can
certainly do our best in a lot of different
categories.
(Applause.)
O'MALLEY: Aman, where are businesses missing
the boat on kind of maximizing their IT spending
dollars today, especially the big companies that you
work with?
BRAR: It's interesting to me kind of with
big companies because startups are a lot savvier on
kind of how to construct this really leveraging, you
know, cloud, leveraging SaaS from the get-go. The
analogy I use is when you turn your water on at home,
the water comes out of your faucet and you do
something with that water, you might cook with it,
you might drink it, you might replenish yourself,
fluid yourself for your next bout of exercise, stay
hydrated, but when you turn that faucet on we take
for granted, everybody in this room, what is actually
happening behind the scenes, right, there's this
enormous infrastructure that's getting water from
somewhere to your kitchen and there's probably a
hundred people touching that supply of water to your
sink, okay, yet we don't really care about that,
right, we want our water, and one of the things we
find in multinationals and large IT firms is they're
having a hard time letting go of the pipes and the
electricity and the people that are involved in
getting the water from point A to point B and what's
happening is all their resources and their
intellectual capital is focused on that because
that's really hard work, that takes a lot of
expertise and, by the way, there aren't enough people
out there to even service your current needs, and so
our argument is just focus on what you're going to do
with the water and let companies like Apparatus, let
companies like ExactTarget really give you the thing
that you need to fuel your business, take that IT
headcount, take those other heads, and the same
argument holds true for companies like Blue (can't
decipher from speaker) in the cloud space and go
focus on driving value for your internal clients, for
your clients, et cetera, and that's essentially the
shift that, quite frankly, has been much slower than
I think people predicted five or six years ago and
that's kind of the march that we're continuing to
move forward with.
O'MALLEY: Great, thanks a lot. And, Jenny,
sorry, we haven't forgotten about you here.
VANCE: That's okay.
O'MALLEY: You have an interesting company.
How did you identify this niche in sales lead tools
and what did it take to make it a player, pretty
successful player so far?
VANCE: Well, a lot of people might not know
this, but I started resumeing I would do anything but
inside sales in my career, so now I've made a company
founded on that is a little bit of a 180. So I think
one of the things that we identified and I identified
probably early on in the business-to-business
community with lead generation is that it's treated
very often as an afterthought, I think that's why a
lot of people maybe know they want to start their
careers there just to get a foot in the door and move
on quickly, it's an area that is treated in many
organizations as a pure volume plate, like "Let's
just get the volume out there into the market, get
the coverage; if we burn some bridges fine, we'll
find some opportunities along the way," and I've
always viewed it a little bit differently in terms of
the opportunity there. I look at our startup
community and it seems like companies are constantly
struggling with the whole chicken or the egg thing,
what comes first, the sales pipeline or the funding.
Investors really want to see a strong sales pipeline
to feel confident making a good investment and yet
companies need funding in order to go capture market,
and the way that tends to get approached is to go
hire enterprise sales reps, start working some deals
and then I start to draw any conclusions about my
market from a use case of a handful of deals that are
either in my pipeline or the few sales ones that I've
had, and what we found in working with a lot of our
clients is that sometimes that can be a false-
positive, sometimes there are better leading
indicators within the market of potential. One of
those, obviously, as Tim mentioned, is digital
marketing, but the lead generation space, if you
think about it in terms of the volume, scope and
coverage across the market, it's the group that's
having the largest number of live dialogs with the
marketplace within a company and yet many companies
aren't cultivating a lot of knowledge from that and
LeadJen has always seen that as a tremendous
opportunity in the marketplace to not only get out
there and find those qualified leads, obviously you
have to yield revenue in order to justify a program
like that, but there's a more scientific approach
that can take place behind it. Where a lot of people
are approaching it as individuals within those roles
on an ad hoc basis, it can be approached with a very
clear process behind it and some really important
measurements coming out of it that will better
understand the market. An example of that is one of
our clients that was very fixated on "financial
services as a key market for us, that's where we're
getting, you know, the best potential and the largest
deals," we have to look at that, of course, revenue
is obviously the first thing you're going to look at
in terms of analyzing where there may be potential,
but through a lead generation campaign we identified
three markets that had three times the response rate
as financial services. It's worth exploring, for
sure, and we feel like that type of information is a
really compelling part of how lead generation
strategies can really drive growth in the startup
community.
O'MALLEY: It's fascinating the amount of
information that you guys have compiled as part of
your tools here for folks. You have been at this not
as long as some of the other companies that are up
here. Do you still have some key lessons fresh in
your mind that you learned when getting LeadJen
started and carried forth to today that might benefit
some tech upstarts in the audience?
VANCE: Sure. I guess in terms of sales
growth, the thing that's been helpful for me as a
business owner is looking at taking the most tactical
thing off the plate first. It's interesting and I've
found that I've done it myself but I've seen it in
other business leaders and some other young companies
that we've worked with is oftentimes we want to take
the most difficult thing off our plate instead of the
most tactical thing and really in terms of driving
growth it's a lot easier to train someone to do some
of the more tactical things and allow an individual
to focus who's already trained and prepared to deal
with the more difficult tasks and strategies, and I
think that's kind of how lead generation plays in,
too, when you look at the sales process and what's
easiest to transition in terms of knowledge as a
founder to that next level of sales, is it easy to
transition all my core competency about my industry
or is it easier to find someone who I can transition
the knowledge that it takes to get that first meeting
and then I as a founder can handle that meeting and
then as I get busier and busier I start to look at
that next most tactical piece of the sales process
and take that off the plate next, so I think that's
been helpful for us in our sales growth, too.
O'MALLEY: That's great news, that's good
advice. In the last decade we've seen a lot of tech
companies arise, have become giants, you have the
Aprimos, the Angie's Lists, ExactTargets, Interactive
Intelligence. Just to the entire panel, do you have
any thoughts about how these big players have
fostered growth and continue to foster growth along
some of the smaller tech companies here?
LANGELLIER: I would say that I think there
have been two main things that I've seen, we talk
about wealth creation and obviously wealth creation
begets more investment and more wealth creation and
I've heard the stat and I don't know if it's true but
how many millionaires are created in some of the IPOs
that happened recently, so that begets more
investment, which begets more startup and
entrepreneurial activity, but I think the thing that
is less tangible but is most just through the
transitions in my life that I've seen is there's a
difference in mindset and I think through
experiencing success people go from kind of a natural
scarcity mentality to much more of an abundance
mentality that says "I've done this before, I've seen
it done, I've been part of it" and a little bit of
you've gotten the hit and you want to do it again and
I think that some of just being part of success on a
corporate level with all of the companies that you
mentioned, I'm certainly excited about the capital
implications but I'm also excited about having a
whole fleet of people who have experienced broad
scale success and are eager to go do it again. I
think we start to see that as people move even out of
those companies and strike out to do things on their
own.
AQUILANO: I absolutely concur with that. We
have a capital solution, we fill part of the gap, but
it is entrepreneurs, right, and experienced
entrepreneurs, and I think IBJ ran a great piece, I
forget how long ago, it was about Software Artistry
was sort of a big bang, right, and we've had all of
these other great companies of late that spawn not
only folks who are willing to invest as angels or in
our fund but have experienced entrepreneurs who go
off into the life blood of what we do. Even at this
table we've got Baker Hill. Dave Becker opened
NASDAQ last week with First Internet Bank who grew
through two recessions, I mean this is great stuff,
Aprimo, all the folks we've talked about, that is
very powerful life blood of this economy, it's a
mindset, but it's simply the number of experienced
entrepreneurs that we're seeing create new companies
and that's getting better and better by the year.
LANGELLIER: It takes the fear factor off the
table.
AQUILANO: It really does.
WHEELER: From the university angle, these
are really essential enabling conditions. We are
still struggling I think to grow the depth of an
entrepreneurial culture in the university so that
Indiana kids don't come here and think "Okay, well,
when I graduate I've got to go work for Procter &
Gamble, or I'm going to shift state or go somewhere
out of state." The School of Informatics has
recently had their entrepreneurial competition called
BEST, some of you guys are involved with that,
Purdue's got a lot of entrepreneurial things going
on, but we've got to keep scaffolding not only the
capital, the mentorship, the good guidance around
these kids who often have good ideas, and the
interesting thing, of course, today is it's not that
you've got to go build a hundred million dollar
bricks factory to get into a business or something,
you can source lots of what you may be doing through
cloud and through other sorts of arrangements, as has
been described here, so I do think these are all
related pieces to making this work in the state.
LANGELLIER: Which is a good point because
I've had several CIOs reference that over time how
many more CIOs there used to be because there are so
many more corporations that were headquartered here
and they've since consolidated or been acquired and
so as a result there aren't as many corporations, so
as we're trying to recruit for big companies we're
not going to have as many of them located here to
recruit for it.
WHEELER: And if I can make one other point
on that, what's changed in our IT labor market and my
peers at the table will probably agree, we run a big
IT shop, we've got a lot of skills, we've got really
good retention and that's worked really well because
when we're being recruited against coastal firms on
cost of living and some of the other challenges we
were able to prevail in some of the things that are
fantastic in the midwest, but increasingly we're
hearing folks from the coast just say "Oh, we don't
care, just sit in Bloomington, sit in South Bend, you
can telecommute and we'll up your salary by some huge
amount of money," so we've got to grow more here in
the state because we're not going to grow an ocean or
mountains, as was recently said, but the labor battle
in these technical fields is really an arm's race
right now.
KOPP: Yeah, if I could add to that,
Indianapolis is the fourth city I've lived in,
actually, so I can brag on the city a little bit. I
just moved here almost four years ago and what I
think makes the tech community here so special is
everybody who's here in the room, I can tell you from
being on the west coast and being on the east coast
you don't find a group of people who want to come
together and sincerely and genuinely help one
another, you really don't see that. I hope you guys
have had a chance to travel and get out and about,
it's much more of a cut-throat startup mentality than
it is everybody come together and the sum is greater
than each one of the parts, and there's a saying for
whoever has much more will be given and from that
person more will be required and I really believe
that, and if you look at the people in this room,
there's Mark Hill who's here, there's so many of the
successful kind of tech luminaries who really helped
get this ecosystem jump-started, they continue to
give back and then others have continued to give back
and the ecosystem is really built on itself far more
than any other software ecosystem that I've seen
anywhere in the country.
O'MALLEY: Well, super! I've heard that
quite a bit lately, talk about that cooperativeness,
willing to work with each other here in this market
and that's an interesting distinction. Just to take
some questions from the audience, someone asks what
are your thoughts on the Yahoo and Best Buy
announcements eliminating or dramatically curtailing
working from home? Has anybody thought about that?
BRAR: A couple times. I think that you
can't hammer-nail the issue, right, so I think from
my perspective I respect what Marissa is trying to
do, I think it's "Hey, the company has some chance of
going out of business," right, and so just
strategically if we keep doing the same thing over
and over and over again you're probably going to have
a pretty predictable result. So it's hard shaking
things up and really trying to get after it and
tightening down and maybe not doing everything the
same way as they've done in the last decade, it's
hard to argue that it's not worth some risk, right,
so I think it's a company-by-company thing. We have
a very flexible work model at Apparatus but we're
actually not huge proponents of working from home by
kind of default, right, so it's a case-by-case basis,
and for us it's about company building and culture
building as we go from 10, 20, 50 to 140 employees
and we want to keep a very loose, kind of not policy-
ridden culture and that's a way for us and we don't
like to have a lot of meetings and there's tons of
these micro meetings happening all day long and
always around people's desks, and so for us, for
example, it's not the best fit model for us and we'll
continue to augment and accent kind of our core
culture with specific cases where work from home
makes sense, and certainly if employees work from
home a day or two it's actually no problem, but I
actually applaud Marissa for what she's trying to do,
I think trying to really reshape the culture at Yahoo
and drive dramatically different results than they
have the last decade is something that's hard to
argue with from my perspective.
VANCE: I would agree with that. I think
that a lot of times we focus on people working from
home and think that it's about productivity in that
environment. We have very measurable solutions that
we use to measure our at-home people versus our
not-at-home people. In terms of production, their
production at times can actually be higher in overall
volume, which is great to see, but what we feel we
lose a little bit in that process is the creativity
and the shared knowledge and being able to — We talk
in our environment about if we're reliant on one
person to always have the right idea or the answer
we're going to be pretty limited pretty quickly, so
the fact that we have other individuals working
together, even though actually the production might
be a little higher, the at-home environment for us in
terms of calls per hour and all of that, the actual
conversion is higher for people in the office versus
at home because they have other people to brainstorm
with and share ideas with.
AQUILANO: I think it's more important for
smaller companies to all be in the same room, it
matters, and when they propose this big virtual
structure we say "You're going to have to prove to us
that it works, otherwise the default is let's try to
be in the same room."
O'MALLEY: Good discussion. Here's a
question, interesting question. The city of
Chattanooga, which to most of us is better known for
the headquarters of the Moon Pie factory, Chattanooga
has invested in a 600-acre section of their downtown
gigabit fiber to every business and residence. They
are also paying $10,000 to techs who relocate and buy
a home. This person asks why can't we get gigabit
fiber two blocks from the Circle and how are we
competing with smaller cities that are making these
types of infrastructure investments?
WHEELER: I might take a first bite at that
one. The data are compelling. The United States is
falling further and further behind leading nations
around the world in these very questions, so let's
just agree to the facts of the matter because this
really is true and it varies some by city, so I think
the simplest answer is the current approach is not
working and that is just waiting for hopefully the
market and a bunch of competing firms to solve what
is ultimately a common infrastructure problem, so the
example that you raised there, a city is trying to
take its destiny in its hands by causing something to
happen with public-private partnerships to move a
certain goal forward, so I think one of the panelists
just said repeating the same thing over and over may
not be the path to success when the indicators aren't
moving in the right direction and this may be the
decade that it's time to rethink why the United
States is falling down this list globally.
O'MALLEY: Great, thanks. Now here's a
question for Tim. Tim, are you seeing a large
percentage of people unsubscribing from e-mail lists
and is there a noticeable retention rate based on an
age demographic?
KOPP: The answer is it depends. Any
marketing medium is about relevancy and, guess what,
if you're not sending relevant, timely messages that
improve somebody's life you can sure bet you're going
to see a lot of unsubscribes. So if you look at a
macro level, no difference in trends. I think what
matters most is the barrier for what is timely,
relevant communication is higher than it's ever been
and if you're a person who's sending out messages
every single day, batch and blast same thing to
everybody, you can sure bet unsubscribes are going to
go up because other marketers have figured it out and
they're really using data to drive relevancy. In
terms of if we're setting trends, some trends with
e-mail, what we're seeing is and what's interesting
is even if you look at social networks, I would say
for some of you guys using LinkedIn, Twitter,
Facebook, have you noticed how much more they're
using e-mail? The way that they're getting you into
the social network and driving you in and around is
through e-mail, which I find very ironic, so the more
social is growing, the more it's actually helping
e-mail. What we're finding is for college students
e-mail may not be as high, it's the first time they
have to start to do online bill payments and they get
some responsibility in their life, that's when e-mail
really starts to increase and play a role in their
life because people don't want paper statements, they
don't want all the paper in their lives, so then
they're definitely signing up, they're part of these
e-mail programs, but it all comes back to data-driven
relevancy, it will be even more so in the future.
O'MALLEY: Sounds great. Well, here's a
question that may interest Aman and Tim in
particular. What advice would you give to an
organization that's behind the game in digital
marketing to get up to speed?
KOPP: Is that for a marketer or is that a
technology company?
O'MALLEY: Basically just an organization in
general, it looks like here, that's kind of behind
the game in digital marketing, is there any advice on
how to get started, getting up to speed here?
KOPP: What I think is amazing is software as
a service in many ways is the great equalizer. We
have built a platform for 6000 customers and the same
thing that Microsoft uses for their thousands of
users all around the world is available for the pizza
shop and the dry-cleaner next door and it's really
causing this democratization of marketing, so we're
finding that software as a service and technology is
this great equalizer, and what I would say is disrupt
yourself, if you see trends coming, disrupt yourself
before somebody in your competitive set does it, move
swiftly, move nimbly, use the technology tools that
are available to everybody, and what we're finding
ironically is it is the small and medium-size
business that is driving, Aman, I think you hit on
this, that it's not always, in fact it's not usually
the enterprise who's driving the greatest amount of
innovation, we're seeing this tremendous amount of
innovation come from small and medium-size businesses
because I absolutely believe the internet software as
a service solutions are just driving this massive
democratization of marketing.
O'MALLEY: Sounds good. Well, this question
is one that a lot of folks probably think about as
they're thinking about their next tech company and I
know that Mike has seen a lot of promising companies.
Are there any particular spaces in the tech realm
here that really seem to have a lot of opportunity in
the next couple of years? Mike has seen some of it
with the Mira Awards candidates, for example.
LANGELLIER: Yeah, I think nationally we
started to see a shift, especially in the last year,
last two years, and I think that that actually plays
into our favor a lot, so if you look nationally at
where venture capital money is invested, for several
years that software has been the lead category for
venture capital investment and within that there was
a big focus on consumer web and social web, so that
begets a lot of investment, and, Don, please jump in
as well, but that begot a lot of the investment in
Facebook, LinkedIn, Zynga, Groupon, a lot of those
companies, and there's a whole slew of startups that
were less on the radar that were invested in because
they fit that category. The problem is that category
is very geographically concentrated, particularly on
the west coast, so that did very well for California,
for example, because I think they have two big
components, one they have big capital that was
willing to invest big dollars and to essentially
getting their eyeballs and figuring out how to get
revenue later, and then you also have these loud
speakers of press machines like TechCrunch, Mashable,
ReadWrite Web, all of them that within one click of a
blog post can get distribution out to a million
people and I've lived it firsthand that if you're not
in their backyard geographically it's tough to get
them to pay attention, they discount what we're doing
here, but what we saw last year I think about with
the IPOs of Zynga, IPOs of Facebook and the IPOs with
Groupon what happened as a result of that, as well as
some of the macro financial issues that happened,
we've realized we've kind of hit a wall in a sense
of, one, we've sort of gamefied people and socialized
people to a limit where we're starting to realize
there's a limit to where things are ready to go and
then also the degree that we're willing to invest
into business models that we aren't really sure
they're tried and true, so what we're starting to see
is much more emphasis on investment and to software
as a service platform and enterprise companies and
that's much more of our strong suit and I think also
there's a lot more emphasis within that, if you break
down that category, into the area where technology
intersects other areas to places like health IT, Don
mentioned that earlier, places like marketing
technology, places like energy and tech, places even
like the intersection of manufacturing, so places
like robotics. We can only innovate on the best way
to aggregate our social networking stream so many
times before it gets passe, and I think now the big
challenge, and there was a lot of talk about this in
DC as well, there are certainly software as a service
plays and platform kind of enterprise software play
which suit us well here, but some of these kind of
innovations at the intersection of health,
intersection of energy and intersection of
manufacturing, for example, they're big capital plays
and there's concern about how are we going to fund
big kind of biotech investments, for example, but
there's a lot of opportunity for us here because
enterprise techs, software as a service is what we do
and we also have key asset investments in things like
bio and things like energy and things like advanced
manufacturing and logistics and others that we just
have to find those areas of opportunity where tech
intersects those industries.
O'MALLEY: That's good. Thanks, Mike. What
engagements have occurred with tech leadership and
local government to assist with attracting new
talent, in other words whether it's being talked
about in the context of mass transit or other civic
planning? In other words, I guess what they're
saying here is is there something that you're trying
to promote that could help attract new talent here?
For example, I don't know if TechPoint is supporting
mass transit expansion, for example.
LANGELLIER: I think there's a lot of debate
about the mass transit, I think that there's
certainly, especially if they're trying to attract
people from other cities where mass transit is sort
of a natural way of life, I think that that's very,
very important. I think our biggest area of
opportunity, though, is in the workforce for a couple
of different reasons. I think that some stats people
may not be aware of is that Indiana is second in the
country in attracting out-of-state students, the
problem is 80 percent turn around and leave, and then
compound that with a third of the students that
actually start here and go to school here leave as
well. So I think the greatest area of opportunity —
A portion of retention — I think it's good for
people to go out and get new experiences, but I think
the thing we can be more bold and deliberate about,
especially as we live in this kind of economy where
the assets that we have here are increasingly
desirable, we need to be more bold and aggressive
about ex pat projects, about repatriating people who
have gone out and come back. Now, if you looked at
the Pew Research numbers on the sequester impact
again, you can say what you want about what the
impact is really going to be, but states like
California, California is going to be hit the
hardest, so there's a lot of kind of disruption
happening in other parts of the country and with
people that have Indiana roots and have had disparate
experiences, that can be very valuable back here and
I think we need to be really aggressive about going
back and getting them. Obviously things like mass
transit need to be on our scorecard of things that we
have to have an answer for, but I think more than
anything it's just aiming the effort at initiatives
like that to get the people here that we need.
WHEELER: Well, I'd like to follow up on that
because I was speaking with some tech leaders from
some of the old firms out in the valley who really
just have employee fatigue of people rotating through
jobs out there and the turnover being very high, also
the cost and such. I do think there are serious
opportunities with some of those firms for location
in the midwest, particularly, you know, one of the
offers we've got from Bloomington is a very strong
pipeline of folks coming out and a lot of these
Indiana students don't want to leave the state, but
we've got to give them a means to stay in the state.
LANGELLIER: Scott's talked about with the
(inaudible) acquisition you guys got to see both
sides of having employees in multiple geographies.
KOPP: Yeah, it's fascinating. Connections
is the big user conference we do here, so we get to
bring people in from all over the world. I swear
they believe we're going to pick them up on tractors
before they really have a chance to experience the
city, and, you know, the truth is it is a phenomenal
city, and kind of classic marketing speak, I don't
know that we've got a repeat problem, it's kind of a
trial problem, we've got to get enough people here
and then once they are here I think more of them will
stick around, particularly a lot of it's tied to life
stage and a lot of what sort of TechPoint started to
do around this but particularly around the moments
where family becomes more important and raising a
family, I think that's where kind of returning back
to the midwest is really important and we have got
some of the best marketing and software executives
from around the world to come back and kind of be a
part of what's happening here.
AQUILANO: Right, and this Orr Fellowship
Program is just one part of the solution as well, in
other words take the best and the brightest students
that are recent graduates, give them a great
entrepreneurial experience by sort of member
organizations, we've had a couple and this was
something started early on by the Angie's List folks
and some other community leaders and the more things
we can do like this to actually keep folks here that
want to be part of our ecosystem and to get people
back, kind of have people come in once they've left.
O'MALLEY: Very good. I hear that
Chattanooga is kidnapping tech workers from
California. We have time for one final question, and
does anybody have any thoughts about how should
companies know when to outsource? Is there a time
when that can be helpful?
VANCE: Well, I do. Yeah, I think one of the
things that — I heard a staggering statistic
recently from an individual that is on an inside
sales team, because obviously I want to talk about
inside sales and lead generation in terms of
outsourcing, but one of the things that she had
shared being part of that team seven years with the
company that she was at is that she had had 11
managers during those seven years, so that's pretty
staggering, it's surprising she was still there for
seven years, frankly, and so I think one of the
challenges is looking at core competency, what am I
best at, making sure that I stay focused on the
things that I'm best at, making sure that I truly
consider all costs when evaluating those decisions
and I think what we tend to find in working with our
clients is that you intend to just look at hourly and
benefits, you forget about things like productivity,
attrition, you know, if I have a full-time employee,
what percentage of their time is actually spent doing
the job that I'm asking them to do versus working in
a billable environment, I feel that's critical in any
role but it definitely plays a part in the lead
generation inside sales capacity, and then what type
of urgency do I have to market and do I have time to
work to establish a best practice or do I need to get
to market quickly and effectively with proven best
practice and a proven model and then can I work with
a firm in any environment or any role that can
actually maybe work on an outsource basis to
establish the benchmark and establish the best
practice but ultimately allow us to bring it inhouse
once we do establish what's working and we start to
gain a little bit of core competency.
AQUILANO: I would say for most of our
smaller companies we tell them to outsource
everything except what's very, very core to your
business and, frankly, most of our companies use one
of Jenny's companies as it is, so that's our
perspective, it's really important when you're young
and trying to grow fast.
BRAR: For larger companies the one thing I'd
add is if you're not managing on your scorecard as an
executive of a large company you probably really
don't care about it and so it's a focus question and
one trap we can see larger companies fall into is
that it becomes kind of purely a cost conversation
and that really isn't a winning conversation for most
outsourcers, it needs to be about their strategic
focus and about what they want to focus on and not
focus on and those are the clients that we certainly
have the most success with. Selling on the cost
piece alone for a large firm can sometimes be a
recipe for disaster, quite frankly. So if it's not
on that senior leadership's scorecard for a large
firm, it's probably being ignored, so why not have
somebody care for it is generally the way we approach
it.
WHEELER: So I'd add one note of caution. In
the IT space there's a pretty clear yo-yo pattern
over the decades of outsourcing, insourcing,
complexity and back, you know, GM's completely
rebuilding an insourced IT capability and there are
two Nobel Prizes in economics that have already been
awarded for this very classic question, I'd encourage
us not to ignore some of the wisdom.
O'MALLEY: Okay.
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