In our interview today, we chatted with Brian Goffman and Erez Barak, co-founders of Optify (www.optify.net), which is venture backed by Madrona Ventures, to learn more about the company and where it fits into the SEO and Internet Marketing area. Optify's local customers include AdReady, SchemaLogic, and Ubermind, along with a number of other firms.
What's the idea behind Optify?
Brian Goffman: Erez and I founded the company in August of 2008. Both of us had lots of experience in building, marketing, and selling web-based or packaged software products. We knew the challenges of marketing on the internet, and only saw that things were getting more complicated with social media. A typical marketer probably has search engine marketing, search engine optimization, pay-per-click campaigns, and now also has social media, a Facebook page, Twitter, webinars, email campaigns, and so on--all of these are making it a longer and longer list. We had been involved with a startup all the way back in 1995, where we had built different technology platforms, including one for AdReady, an optimization for display advertising. Coming at this from different angles, we realized we could build a software-based solution to bring very advanced techniques around marketing to a broader audience. We knew that with software, we could make people much more productive and efficient.
We talked with a bunch of customers we though would be interested, and we heard over and over that there were two areas that they needed help from software. Search engine marketing, and social media. So, we built our first prototype, showed it to people, got some positive feedback, to the point that they wanted to pay us even before the software was build. Since then, we have been executing on that idea, and now have around forty customers, and growing pretty rapidly every week.
We sell the software on a subscription basis, so it's pretty easy to buy, and there's not a lot of up-front cost. You can, if you want, pay upfront, and get a discount. We make it really easy to use, with a 30 or 14 day trial, so they can see results very quickly. Our vision is to be the leading provider of software for marketers, in every area of their needs. Right now, we've started by focusing on search engine marketing and social media.
Talk about your background more?
Brian Goffman: I spent three years at Madrona Venture Group, one of the leading investors in the Pacific Northwest, and my background goes back to Amazon and aQuantive, Pointcast, and other leading companies. At Madrona, I was looking at companies as an investor, but also as an operator, helping companies get started. Before that, I was at MIcrosoft, and ran the marketing team for unified communications, as a result of acquisition of PlaceWare, which became Live Meeting. Before that, I was at Austin Ventures, as a venture capitalist, and was involved in a number of companies that are now pretty big players, including Listen.com, and Motive, which was public and was recently acquired, and a number of other companies. I also was in the valley at a couple of startups, one which was very successful and another that was not. I also was at Harvard and McKinsey & Company as a consultant.
Erez Barak: I cam out of HP, where I was a Direct of Products at its load testing business. I got HP from an acquisition, when they bough Mercury Interactive. That was a huge, 4.5 billion deal, and by that time Mercury had grown in seven years from 50 million to 1 billion in revenues, mostly as a result of acquisition. One of those acquisitions was Performant, which was in Kirkland, a company which was working very closely with Mercury on J2EE and J2EE related web load testing. When Mercury acquired Performant, I came out to the area. When I was as Mercury, we grew our load testing business from $15.0M when I took over, to $200M dollars. It was an interesting move, from the desktop world to the web world, which is what really grew the business. The other thing you saw in the load testing business was that it was considered something of an art, and black magic. It started as something where someone would do it for you, and we ended up turning it into self service software any customer could use. You also see that trend in SEO. Right now, when you look at SEO, the consultants tell you that they are magicians--they can't tell you how it will happen--but it's actually a very practical science. What we're doing is taking that, and packaging that into software for marketers. Prior to Mercury, I was at a couple of startups in Israel.
Was this incubated in Madrona, considering your role there at the time?
Brian Goffman: Erez and I did start the company when I was a venture partner, and I effectively transferred into Entrepreneur-in-Residence mode. They gave us an office and support, we went back and forth often on business ideas and plans, and they were very supportive in the early days. But, we still had to go out and do some objective fundraising when it came to raising money, so I wouldn't called it incubated, because that's different. But, they did give lots of support.
Speaking of fundraising, how did that effort go?
Brian Goffman: It went very well. I've been doing this long enough I knew all of the players. It was a very tough time to be talking to investors. It was the fall of 2008, and the market was kind of collapsing, and venture capitalists were running for shelter. But, we were able to tell a very good story, and we had the ability to find customers who understood what we were doing. I think it was a bit of a given that Madrona would invest, but we believed we needed to get feedback. Ultimately, they did invest, but we talked to other firms asking them to be part of the round. In the end, the round we did was about the right size for Madrona to be the lead, and although larger firms wanted to put in a certain amount of money, the economics didn't work out. We did get a number of prominent angels in the round, and we'll go to those same firms for our Series B. The angel investors plus Madrona were a very good mix.
What's the connection of Salesforce.com into your software?
Brian Goffman: We are launching the application on AppExchange. This allows you to run Optify on Salesforce, so that you can all of your data in optify--meaning all your lead data, visits, lead scorers--all of that will be published into Salesforce. We also have some packaged reports and a dashboard when you install the application. We had to go through quite a bit of security reviews and a lot of investment to get into AppExchange. We're also upgrading our own reporting infrastructure, as we've been collecting a huge amount of data. We're on track to 70 million views on our customer base, and that's growing at about 100 percent a month. We're collecting all that data across both smaller sites and very large companies, including Lexis/Nexis, Concur, and Sonosite--and that data gives us the ability to publish lots of more advanced reports. The other thing we announced recently is a partnership with ExactTarget, which is the largest email provider in terms of transactional email. We've got a partnership which takes Optify's data about leads, and uses that to create rports that are used to trigger ExactTarget emails, so you can narrow down your mailing list based on lead behavior.
Does your software include managing pay-per-click campaigns, or is this just web site optimization?
Erez Barak: What we are doing is lots of reporting and lead intelligence. We track and report on any marketing activity that you execute on, whether that includes email campaigns, SEO, or SEM campaigns, or even webinars. All of those will show up in your reports on lead generation, and will tell you what you've done and what the business results are. We also have a professional Twitter client, which allows you to manage multiple Twitter accounts, using multiple users, and execute marketing campaigns that align with your SEO, with all the right keywords and sending out the right messages via Twitter. You can measure the impact of your Twitter campaign, using visits and leads as a measurement, rather than just buzz or retweets or mentions. So, you can take all of the actions within your SEO or social media campaigns, and normalize those to your business metrics, such as visits and lead you get via your web site. That allows that to be comparable as part of your marketing mix.