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Here’s the program.
Andrew Warner: Hey, everyone. It’s Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart. Big question of today is, when should you partner instead of building you own team?
Joining me is Mok Oh. He is the cofounder of Everyscape, which raised over $17 million and has a product that’s like Google Street View for the indoors. He told me how his company made mistake early on by building out its own sales. So I invited him to talk about what happened and what he learned from the process, and of course, what they ended up doing.
Today he is the Chief Innovation Officer at Where Inc., which if you look at his face, you can see he’s really enthused to be there, and we’ll find out what especially happened that’s good news for Where Inc. recently. And Where Inc. is a company that connects consumers and merchants.
Welcome to Mixergy.
Mok Oh: Hey, how are you?
Andrew: Good, good. Where do we start? I know what, I want my audience to understand what EveryScape is. How would someone who’s now listening to us, maybe while running, maybe sitting at his desk, how would he interact with EveryScape?
Mok: So, EveryScape, you can think about in more of, sort of, broad way; I try to compare it as, it’s like Google Street View for the interiors. So not only can people, sort of, immersively, on their web and mobile devices, walk around on the street side, but actually one of the biggest paying points is that, in Google Street View you can walk around right in front of a store, you just can’t go in. If it’s a restaurant that you want to try, you certainly want to go inside and feel the ambiance.
Andrew: Why? Why do I want to go inside the restaurant and see inside? Don’t I want to know what the food is? Do I need to know the layout?
Mok: That’s a really good question. So, at the end of the day, places like restaurants and hotels, it’s more about their not just selling food, their selling the space. So, especially for hotels, their inventory is their space. So that’s what really you want to sell. Places like Amazon.com they sell certain goods and it makes sense to have good descriptions and pictures of those things, and it’s more like a person looking at an object.
You want an immersive experience when you really want to understand a space. It turns out, and we’ve done many studies here, restaurants, like eat, drinking, playing, and sleeping, those kinds of categories it works well for immersive imagery; just because people want to understand. For example, I have a couple of kids and when our family goes out to eat, let’s say. We are very hesitant to go to new places, right? Because we want to make sure that it’s a good experience. Or if my wife and I want to go out for dinner, we get the baby sitter out and then we have our night out, a very rare moment. We want to make sure that we a great experience.
Understanding what kind of place, is it a place with dead animals on the wall or is it a nice, sort of, romantic ambiance? That certainly helps my decision making. Of course the reviews and all of the ancillary data helps me better understand the space, but ultimately at the end of the day, I think the visual pictures are worth a thousand words, really. So immersive imagery for interiors is better.
Andrew: Okay, I understand now. I agree. I do want to get a sense of the atmosphere, just as I want to get a sense of the kind of food that’s there. Where would I or where would the person listening to us be able to go online to get this immersive experience? We can’t go to Google right? Because Google doesn’t work with EveryScape. Where would we be able to go to experience this?
Mok: So right now from of the distribution perspective, you can go Everyscape.com. You can also go to the iPhone app store and download EveryScape Eats. It’s sort of a restaurant focused application. And we’re launching city by city. We’ve recently launched D.C., actually. It has a crazy amount of content there. So it’s a wonderful, wonderful experience. I would encourage everyone to download it and check it out for yourself.
Not just us, but we’ve also partnered up with AT&T. So if you go to yellowpages.com a lot of the businesses there will have will have our interior views. The great thing is, you can go to the Yellow Pages website and find a business and you can click on a link and actually be in the business. And you can click and walk around the place and you’ll see little icons there. If it’s like a video icon then you can actually see the proprietor talking about their business.
Andrew: Actually, I pulled up the iPhone app here to maybe show people how it works.
Mok: Yeah, that’s awesome.
Andrew: Of course that’s part of my research, but I don’t even know if it makes sense for me to point out the way it works. This isn’t about really the product. The product is a way of understanding the business and the business is what Mixergy’s about. Let’s get to know the business a little bit better before we dig into why you’d need sales people and what happened there.
Mok: Yeah.
Andrew: This is something that you worked on when you were at MIT right?
Mok: Yes.
Andrew: What was the original idea for EveryScape?
Mok: The original idea, which was part of my thesis, was, well actually there is a whole story of that. Of course, when you’re a PhD student you try to look for a great innovation or publication that’s unique and that hasn’t been done before. So lots of things happened. One of the things that I was very passionate about was creating photorealistic cities. So that was my initial attempt. How do we replicate Boston digitally? It’s a hard problem. So I started by saying, “All right. What’s the simplest answer here?” Hire a bunch of UROP’s, which are undergraduates, and just brute force model this thing and see how long it takes. So we’ve done Boston, but it took a long, long time.
Andrew: You mean, you sent videographers to just . . .
Mok: No. This was built using CAD modeling systems.
Andrew: Oh, on the computer you replicated it. Okay.
Mok: So we went to City Hall, got the footprints of Boston, and went around taking pictures of facades. Got those things, created 3D geometry and pasted the photo in the front. It took forever. It was such . . .
Andrew: Why did you do that? That seems like an interesting puzzle and a fun challenge when you start, but what’s the point of it? What were you thinking?
Mok: Well, there was no LiDAR then. There’s real no real scalable way to do that. So it was such a challenging problem that if we brute forced it, if we did it manually, I wanted to understand how long would it take. So having like six undergraduates actually going out there and taking pictures and modeling; how long does it take to just do Boston? Right? And we weren’t able to finish it after three months. We just couldn’t finish it.
Andrew: Are they celebrating in the background now as we’re talking?
Mok: Yes. [laughs]
Andrew: And your door’s shut and we still hear them?
Mok: There’s a lot going on in the background, so yeah.
Andrew: The door’s shut. All right, we’re going to come to . . . [SS] . . . so he can explain what’s going on.
Okay. I understand that you did it. I understand that it was a challenge.
Mok: Yes.
Andrew: Were you thinking that this would be a business? Did you say in the back of your head, If I could model Boston then I could probably model all of the country, and next the world, and then there will be a business in it? Or were you just thinking this is a fun puzzle?
Mok: Of course it’s somewhere between. I was an early Ph.D. student then so it was more of academic question of; how do we replicate the world digitally? And then, how do we replicate the world in real-time?
Andrew: Okay.
Mok: How do you replicate the world so that there is a historical aspect of it all the way back? So it’s a very academic question more than trying to create a business model out it. It’s a digital platform and I thought lots of things can happen on top of that, but what is it going to take to build that? So that was the initial question that I tried answering. Did it the brute-force way then quickly realized; OK, this is not going to work.
The next, sort of, challenge that I worked on was; was, okay, let’s try to a realistic lighting simulation of a whole entire city.
Andrew: Actually, let me pause just for a second and say, at what point does this become a business? When do you decide this clever challenge that we overcame is going to become something that could potentially have a business model behind it?
Mok: That was towards the end of my PC career, actually.
Andrew: Okay. And what was the vision for the business that you had?
Mok: I didn’t. I had no idea.
Andrew: You just knew that this was cool and there should be some business applications to it, and I’m going to try.
Mok: Yeah. It was like, it feels like the wind is blowing that way, it could be helpful. I don’t know anything about starting companies. I don’t know anything about business at all, at that time.
Andrew: And, if I understand this right, was this 2002?
Mok: Yeah. 2002 is when I graduated.
Andrew: OK.
Mok: The work was like late 1990’s. Right? 1998 or 1999, is when I really dove into this problem of trying create scalable, digital, replication of a real world.
Andrew: Okay. So you raised money almost, soon after you launched, right?
Mok: No. So 2002 was my graduation.
Andrew: Okay.
Mok: And we bootstrapped it for about a year and a half. Because, I thought we can get customers and really float this up and while we’re building the technology itself we can still live. And also, the financial requirements were fairly low, because one, my wife had a job, that helped a lot. Two, I was fresh out of grad school, so I was used to living poorly. The decision was like, yep, this is great timing to start a company, let’s bootstrap it and see how far it goes.
Andrew: Where was the revenue going to come from that would help you get by? You said you could charge companies?
Mok: Right. We started with the travel sector, hotels basically. So you’re talking about early 2000’s so the web was very nascent. There was really no 3D viewer, there’s really no 3D viewer today. Streaming movies weren’t really there. YouTube wasn’t there yet. There were a slew of problems. So we ended up trying to provide, sort of, multimedia content for hotels. And we had about six or seven different hotels that were our customers, and we were doing fairly well, actually.
Also, Bill Horner, he had a effort going called, Feature Boston, so that was for Big Dig in Boston. I don’t know if people know about the Big Dig, but there’s a huge highway that went over Boston. It was ugly as anything. It’s a huge monstrous Highway 93 that went over Boston. And for 20 plus years, people in Boston were trying to bring that down. So we’ve done with Bill Horner, also, was trying to really to visualize what the whole place would look like. So we took pictures of more symitry [sounds like] and started creating technology and content for Boston. It’s like a whole mile worth on content that . . .
Andrew: But was there money in that? No.
Mok: Actually, yeah. It was . . .
Andrew: Oh, okay. So that was a contract that you had?
Mok: Yes. Bill not only was he helping us, in some sense he was, kind of, funding us as well. Yeah.
Andrew: Okay. So, I can see that. I can see hotels would want to pay you to give their potential customers an interior view of their buildings. Sounds like Bill gave you a great opportunity there.
Mok: Yeah.
Andrew: Business was rolling along. At what point did you say, “Let’s go out and get some funding”?
Mok: That’s very clear. 2003, I went to a conference called Cbref [?], which is a special interest group in graphics. And it’s a huge show, I think, 50,000 people show up for various reasons. And on the show floor, which is huge, you go and every company I felt like, what was innovating and making progress in terms of 3D or graphics or imagery, and ingestion of that, having storage solutions. Everything was moving so fast and I felt like, in some sense, I was going after customer after customer and not being scalable enough.
Andrew: Ah, interesting. Yes.
Mok: And that was the point. I was, like, after the show I had that oh s*** moment. It’s like, I’m not scaling fast enough. We’ve got to grow, we have to grow now. So right after that we were, like, let’s go raise some funds.
Andrew: Okay. And you really had a model there, that if you added more money to it and you could scale it out, it would grow because, how many cities can you cover on your own? So you’re thinking we get more money, we send out more representatives to do what I’m doing in my little city, all over the country.
Mok: Yeah. Actually the initial funding we raised $3.5 million. Series A was, try to build a product. So we hired a lot of engineers and try to really build a kick-ass product, and that after Series A. And quickly, the thing that we learned was that after doing a lot of market studies, do we really want to give away this crown jewel. Because even after many years, not everyone can do what we do.
So I guess fast forwarding to 2005: When we’re building this, we’re like, OK we don’t want to give this out to people. We’ve built this great product. We’ll make more money when we actually become more service oriented. So not giving away the technology but we can give away content and sell the content.
So, actually, it was one of these, in some sort of words, a sort of cutting-edge, or maybe even a bleeding-edge of thinking at the time. Because it was, like, 2005 that we were saying, we can sell content.
Andrew: Sell it to who? You’re thinking of selling it to mapping sites?
Mok: Yes. Well, hotels certainly had. So, travel industry wants to really show off their space. So having something photorealistic, even 3D photorealistic was content medium that we can actually monetize, coming out of the hotels and hotel chains’ marketing budget.
So the cycle was about 12 months to really get in, but once really in partnership, these people really loved their content and they’ve been able to use it. At one form or another, there for a while they felt just a [??] they kept on spending money on us.
Andrew: I’m sorry, but I’m not sure that I understand. You’re saying you want to go in and you want to capture the interior of all these places . . .
Mok: Yes.
Andrew: And do it for free, and then you want to sell it to them?
Mok: No. For creating the content, they would pay up-front for us. So the market is, certainly you can say, is travel. So hotels, meeting spaces, wedding banquet areas, and things like that where actually these people are trying to sell space to somebody else. They didn’t have a great solution to show off their space and what it could be or what it really looks like. Even today, if you look at how, for example, meeting planners sell space, it’s sort of a fact sheet and a footprint of the space, and some pictures. But what would it look like when we have a wedding there? What would it look like when a conference there? All these things are questions that people can’t quite visualize unless they actually see for themselves. But there’s a lot more multimedia coming in, but what if you can actually virtually walk through the whole space and experience the thing.
And so those were our early adopters in terms of paying for content to EveryScape. So we’ve continued to grow our travel sector business unit from there.
Andrew: Okay. Now I might really be slow, but I just want to make sure that I fully understand. It’s the locations that would pay to have you create this on their behalf.
Mok: Yes.
Andrew: Okay. Gotcha.
Mok: Yes.
Andrew: Okay. I see now the model and now I see that you say, we want to grow, we need more sales people, because I can’t go out there on my own.
Mok: Yes.
Andrew: Is this the point where you decide that you’re going to start building out your sells team, after you’ve raised a little bit of money?
Mok: Yes. So Series B we closed in 2008. And the whole point there was, let’s blow this out, scale it up. By that time we’d what the right technology is. We figured out how to leverage the Internet. We figured out how to distribute the content, through Flash. All these other technologies kind of came to a point where, okay, it makes sense.
Andrew: We’ve got a fire. So let’s add fuel to it, baby.
Mok: Exactly. So, we raised Series B and the first thing that tried to go direct. So the travel sector direct made sense. So, now we’re going to the local market, SMB market, basically. You can think about it as, more or less, a longer tail of businesses but there’s a lot of money there. So we went direct and, of course, the price points they’ve got to be a lot lower than a hotel. You know, if I’m a mom-and-pop shop on the corner that sell widgets, how much marketing budget do I have to invest in content like this?
Andrew: Right. I’m thinking of a rug store, for example, they might want people to see the space and to get a sense that there are a lot of rugs and there’s a lot of space in this place. But really, how much money do they have and how much willingness do they to invest in an Internet strategy that’s brand spanking new?
Mok: Exactly. So, I think, the type of business that they are varies from vertical to vertical. One thing that’s interesting is a lot law firms and hospitals and dentists they want to get interior pictures. So, we’re like, why? And they’re like, well ‘cuz we want to show that we have the latest equipment, we’re clean, we have friendly staff. It’s more about the experience and we show our media showed a much better way to experience their space.
Andrew: Okay. And were you going to hire both sales people and content creators. I forget what you guys call them, but where you going to hire the people who would capture the space and the people who would sell the business owner on having his place captured?
Mok: Right. Okay. So let me give you, I guess, the people and the process of how this works. So, first there’s got to be some people selling it and contacting the businesses. Once that’s sold, we need photographers to go in and take the pictures. Once that’s done they need to upload it to a cloud server. Once that’s done we need artists in-house to actually, more of a QA function, but making sure the pictures look beautiful. And finally, we need a way to deploy that and how it back out so that the distribution works out. And, of course, at the distribution end we need distribution partners, like Yellow Pages and Bing. So there’s lots of different players. And the vision is to have this working for the whole world. We want this everywhere.
So in 2008 we wanted to go to direct sells and really try to test it out. And we grew that team.
Andrew: To how many? How big did you get?
Mok: I think we had about 30 people.
Andrew: 30 people?
Mok: 30 salespeople.
Andrew: Okay. The idea is; all 30 people, or how ever many you get from Day One and you grow to 30, they’re all going to be in your office making phone calls?
Mok: We had regional offices.
Andrew: Oh, regional. So they would all be in their parts of the country making phone calls?
Mok: Yes. Yes. So we wanted to grow geographical, starting from some of the bigger DMA’s, Boston, New York, San Francisco, and then we started getting coastal cities too, and then more like Texas and Chicago areas.
Andrew: How quickly did you go from zero or from a couple of people up to 30?
Mok: I believe, probably a couple of quarters.
Andrew: A couple of quarters. So we’re talking about a half a year or so you’re going from nothing to 30. That’s fast but it also makes a lot of sense, because you have to capture the space.
Mok: Yes. Yes that’s right.
Andrew: Before we get into what didn’t go right with that; let’s talk about what did go right. You now have an army of people who are ready to make phone calls and were all dedicated to your company.
Mok: Yeah.
Andrew: What’s the good stuff that comes from that?
Mok: Direct feedback. So we have people who are in our company, actually, not just selling, but, optimizing how to sell. So the goal is to get customer acquisition costs to go down as much as you can. So, understanding what sells or what sells pitch works better than others.
Andrew: I love it. Do you have an example of something that you learned about how position and how to pitch your product, because you had all these sales people?
Mok: Right. So it’s turns out that a lot of the SMB folks, for example, restaurant owners, their awesome at maintaining the restaurant. If you’re a chef, their awesome at making the food. If you ask them about Internet, they have no idea. If you ask them about how you use your dollars, they have no idea. So they wanted to simplify, even to a check box. You know like, check, OK, I’m done. I’ve spent my year’s worth of marketing dollars, let’s move on. So they can focus on their business.
So that’s what they really wanted. That was one of the learns that we got. So what we try to do is a quick email and sending them an example of links so they can click it. If they are in a certain specific vertical like restaurants then would make sure the links are more towards the restaurants that are nearby, and not just nearby, but of what we call bell cows. So the leaders in that hyper-local space of each vertical, we would have them as our customers and we would them a link. So once they click it and say, “Oh, my gosh, a five-star hotel, or five-star restaurant has this thing. I’m a two and a half-star but still I’m going to be like them, therefore, I’m going to do it.” So that sort of hyper-local example is where your competitors or some people that you respect in your business around the area. They have a part [?] and they understand your product.
So some of the other learns was that the more time that we spent in region or a DMA market the cost of customer acquisition went down. Because, even though we’re a small start up, people talk, it’s a hyper-local region so that’s why it make sense to not go, sort of, shotgun approach to all, but going city by city makes a lot of sense. Because we got this image of a big city, the people in that vertical market all talk to each other. So, it turns out that the longer you market and focus in a DMA the lower your customer acquisition cost is going to be, because they talk and they validate. People love our product. Therefore it goes hyper-local viral. Now when we call, we learned that, it went from, “Hello this someone calling from EveryScape,” and the response is like, “Every who?” It went from there to EveryScape and they go, “Oh, yeah I’ve heard of you guys. Let me know, what’s the cost.” So through a short amount of time you cut down that touch point that you’ve got to have, that could be a lot more expensive.
Andrew: Okay. So you learn it to be checkbox simple. So simple they just check off a box and they to move on.
Mok: Yeah. Right.
Andrew: You’ve learned to give them examples from the top people who they respect in their neighborhood; so that they want to be like them. Aspirational examples. And you’ve learned that the more focused you are in local hyper-niche area, the more people know you and the easier the sales become and the costs per acquisition goes down.
Mok: That’s a fact.
Andrew: Your sales . . . thanks I just interrupted you as you said that. But your sales process was you make the phone call, if they express interest you send them an example, if they buy, they buy online or from a salesman who follows up. Do I have that right?
Mok: Yes. Exactly, exactly.
Andrew: All right. So that makes a lot of sense. Your vision is coming to a reality. Everything seems OK, but as we’ve said this is one side of the equation. The other side of the equation is, having your own sales team was tough. What were some of the challenges?
Mok: It’s tough because the cost of customer acquisition became expensive. And I don’t know, personally, what the magic number is, but I do believe that there’s a tipping point where when you get to a certain scale of direct sales force then the RI happens and it tips over to the other side. I believe our sales force was more on the smaller side and we didn’t have the brand. So still the costs of customer acquisition was fairly high.
Andrew: I see. Your saying that you have to scale big enough for the economies of scale to impact you and you don’t know where that number is, but it’s much bigger than you were at 30 people?
Mok: Yes. Yes. I’m certain that there is a case study out somewhere out there, but the comparison could be the stuff [??] like AT&T, 5,000 sales force strong, huge company. These are feet-in- the-street going out there and selling there and selling distribution of their listing to SMBs, and it works. So there is certainly the brand, there’s the force, like a highly, highly optimized force as well, and their all over the nation. So if that’s our goal and we start from 30 people, I don’t know when in that growth it goes from negative to positive in terms on sales.
Andrew: I see.
Mok: The other unfortunate thing was that as soon as we start that that’s when the economy tanked and the SMB market, pretty much, shut down. So I really would have liked to push that and figure out what that was and how do we really hone it. And is it even really at a sales force of 30 strong; what can we do to make things happen. I believe that if we had more time, we could have figured it out and be able to project it to a point where here’s the spreadsheet, here’s the model, and this is where we need to get to. I really would’ve loved to have that happened.
Yeah. So the timing and certainly some of the external forces that happened wasn’t on our side for that.
Andrew: Do you believe that if you focused on a small city and tried to flood it with sales people and then figured out, somewhere within there, how many is the optimal number of salespeople to get the economies of scale they you need without overdoing it? Do you believe if you had concentrated your effect on one city you would have gotten enough learnings that you would have know what the magic number of sales people was to have for the country? I see.
Mok: I believe that. I really believe that. We have a great team at EveryScape and so I believe that given a bit more time that we could’ve projected, could have had the right model, could’ve had the right sales pitch, could’ve had, you know . . . so I honestly believe that could made that work, I do.
Andrew: Okay. All right. Fair enough. But with the way you laid it out it wasn’t economically feasible to continue pumping more sales people into this process, only because the costs didn’t make sense. Everything else worked; you were converting, you were learning, you were improving the product and the sales process thanks to your sales people.
Okay. Fair point. Now you need to shift. How do you shift? I mentioned that partnership was the answer but what’s the partnership and how did you discover it?
Mok: So, the question was, how do we scale this up, right? So there are lots of different points. So we’re talking about the front, the first one is sales, customer acquisition costs, bringing it back down, and how do we really reach out and have wide distribution of that. Direct was great, but, of course, the obvious answer was, what if we partner up with people, AT&T, who had 5,000 people doing exactly what we’re trying to do, selling something from lickety bag [sound like]. So it took a long time. Of course it’s a long process to be partnered up with such a big company. But we’ve started that a while back and nail that and now we have folks at AT&T selling our stuff very, very well, actually. It’s looking so positive I’m really psyched up.
Andrew: I can see that.
Mok: Yeah, ha.
Andrew: Let me make sure I understand now process. Obviously we know selling on your own, we know how it works; give a commission to your sales person, yada yada. We all know that process. Working with a partner like AT&T means, when AT&T calls up its customers to renew their Yellow Page purchases and I forget what their web based Yellow Page service is, but both the paper and the web, what is it called?
Mok: YP.com
Andrew: Right. YP.com. I’ve seen their ads. So YP.com and the book too, the paper books?
Mok: I think we’re partnered up more with the digital folks, because our content’s digital.
Andrew: Gotcha. Okay. So there are businesses that already have YP.com; purchases in the past, AT&T calls them up to renew, and they say, “By the way, we also offer this EveryScape option, which will allow you to have a full interior experience designed for your store, do you want it,” and that’s what they do, and then AT&T gets a commission, and you get the sale, and you process the sale?
Mok: That’s right. Exactly.
Andrew: All right. Okay.
Mok: Sort of, especially going back to the sales side, all the learnings that we’ve done because we went direct, we’ve experienced it, we were able to get the perfect marketing material. Every person that’s feeding the street has a mobile device and now we have a very YP specific mobile demo that they can say, ‘Hey, this is exactly what you can look for.’ Or they can even go to our EveryScape Eats app and say, “Oh, here’s a restaurant this is the content that they have. Oh, by the way, you can also have your own mobile content, if you like, because we have a great SDK API, so if you want to build your own, you can do that. Also, you can have same content on your website. Oh, by the way, it’s going to be on YP.com, it’s going to be on Bing.com.” Then they’re like, “Okay, done. What’s the costs?”
Andrew: Gotcha.
Mok: So the sale process is really optimal, reflects [sounds like] to our direct efforts in really refining what that pitch is; what worked and what didn’t work. Tackling, I believe it was, 65 different verticles and knowing a pitch for each and every one of them.
Andrew: What’s and unexpected vertical that’s within the 65? Restaurants, obvious. Hotels, obvious. What’s one that’s unexpected?
Mok: Yeah. As I said, dentist office.
Andrew: Dentist office?
Mok: Yeah. And thing is like, we ask then why. And then they’re like, well over there. And then you can sort of commercially [sounds like] look and you see a great area for the kids to play, toys and all that stuff. So while you’re getting your teeth cleaned you can bring your kids along. I mean, they’re safe and they’ll be occupied. So even things like that or going into the state-of-the-art cleaning devices. I mean, plastic surgeons.
There are lots of people who are actually very interested in showing their space. It turns out that not only are they proud of their business but they want to show it. It’s also an emotional tie.
Andrew: I see.
Mok: “It’s my blood, sweat, and tears, building this brick and mortar business. I want to show it off. I want people to come in and appreciate what I’ve done.” So there’s that. It’s not really vanity, that’s not the right . . .
Andrew: Pride.
Mok: Yeah.
Andrew: Pride of . . .
Mok: What they have. Yes. Yes.
Andrew: I’m putting myself in the shoes of the person who’s listening to us right now and I’m imagining that that person is saying, “Okay. Great AT&T is the big answer, but how do I get into AT&T?” So what I’m wondering here is, how do you get AT&T to listen to you? How do you get them to partner with you? Tell me the story of how you go from strangers to partners.
Mok: I’ve only played an ancillary role to that, because we have a great outward facing team. Our BD team is strong. Our CO is very strong. So it was really their blood, sweat, and tears to make this happen.
Andrew: Did they have a connection to AT&T before this?
Mok. No. I’m pretty sure we did. I’m not so sure that we had it at the right level. But, yeah, I think very early on we able to connect with the right people in AT&T. Not only that I think we have a very compelling product. We have a very compelling history of how to sell it. We have a very compelling price point. All these things made sense. So, yeah, it just worked out. It just took a lot longer time, basically.
Andrew: So what do you lose by partnering up with AT&T?
Mok: I don’t know. We certainly went direct to understand the markets learn and that we certainly could not have done without. Right now it’s hard to say.
Andrew: What about, is it that you lose learnings, I’m sorry go ahead.
Mok: I mean margins you know, but even that’s not an issue at this point, especially with good partners like AT&T. Theoretically anyway, if we go direct and we can’t scale it up, that’s mainly I would say, the trigger point would be, we’ll make better margins. But the thing is, I don’t think we’ll really ever get that big. And even having that many people selling the stuff is a great opportunity. In hindsight, 20/20, yeah, partnership made a lot of sense. It makes a lot of sense. I don’t see us changing that anytime in the future.
Andrew: How long does it take to go from idea that you need to partner to actual partnership?
Mok: Well, I think, AT&T has very high bar in terms of who their partners are so it took us a long time to really prove that. I think that was probably about 12 months plus effort. From idea to execution I think that was fairly fast. So from idea to let’s go contact all these big IYP players and try to really find out who we can partner up with right away. That was like a day. Let’s do it, then go. The action happened soon but the that whole process of finally closing the deal took a long time.
Andrew: So you put together a list in about a day of potential partners, you start knocking on doors, building your relationship up the ladder to the right person, convincing that right person, experimenting with him, and so on. That second part of the equation, after you right down the list of potential partners; takes maybe six months? A year?
Mok: About a year.
Andrew: About a year, okay.
Mok: Yeah. If there are new companies trying to really partner up with AT&T. If you have to get a timeline going, I would say safely put a year there. Just because it’s a long process and I think they’re very, very selective about who they partner up with. But once you’re in, you’re in, you’re part of that family, so it’s awesome.
Andrew: Okay. Another, actually there are a couple of questions. I know one big question on my audience’s mind, but we need to lead into that by asking this question. The scape artists that are all over the coun-, is that what they’re called, scape artists?
Mok: We call it the Ambassador Program. Yeah, scape artists were the initial term.
Andrew: That’s what it used to be called. Okay.
Mok: Now we call it the Ambassador Program.
Andrew: The ambassador. How do you get an ambassador program that’s all across the country that you know, boom, if you need to call on somebody, there’s somebody there to go and shoot the inside of a place.
Mok: Yeah. So sales is the very first process as we’ve said. There, uh, I forgot, some commercial comes to mind, but then you’re so excited about, “Yes, we closed AT&T,” and then you’re, like, “Oh, my god, we closed AT&T.” So how many markets and where and how? Of course, I mean, we’ve been trying to ramp our photographers off of a photography network. But it took a while actually.
It really took a while, because we’re trying to hire, train, and certify these photographers; they’re representing EveryScape, right. I think we have about 300 plus photographers all over the U.S. now. But to build that network, it took a long time. It took a lot of consistent pinging them after they’ve been certified and trained. They are like, “OkayK. When are we getting some jobs?” And like, “Hold on, because we haven’t really closed AT&T yet.” And then okay. You know, one month later, two months later, six months later, some of that I think, probably twelve months later. Because we started as soon as we won AT&T. We wanted to grow the network right away.
So that took a while. It’s an iterative process. We have our website, there’s an ambassador.everyscape.com. You go there and there’s a bunch of videos and things like that. And we use off the shelf equipment so a lot of the photographers already the equipment to go and . . .
Andrew: So how do you get all those photographers?
Mok: We did everything, from Craigslist listing to virally tweeting about it in different DMAs, and just going out there. We had a full head of HR persons just constantly hiring. . . .
Andrew: When you say hiring, they don’t get paid except a percentage of the deal. They get paid based on what they shoot?
Mok: Yes. They get paid for the number of pictures that they take.
Andrew: The number of pictures. So the person who needed to wait for 12 months, for 12 months didn’t get paid, but they didn’t lose any money?
Mok: No. Exactly. Typically these are photographers and, you know, if you’re a wedding photographer and you have a lot of down time between weekends. So there is certainly time in a day where they can actually go out and make extra money through a consulting kind of thing. So what we’ve done is that we’ve started the Ambassador Program. People can go onto the web and be certified. There’s a certain test that you’ve got to go through. And we actually, I don’t know if this is still true or not, but there was a time when we said, “Okay. Go out and convince some businesses to take the picture for you, as your test and once you upload and that works out, we’ll pay you right away, even if it’s not part of our thing.” So they can actually have an experience of that.
Andrew: I see. So you’re paying them for the test, you’re paying them for experience, but not that much for them, not that much for you. It’s just you getting everything lined up?
Mok: Yes. Exactly.
Andrew: So here’s the question that I was going to ask earlier and I needed a little bit of prep for it.
Mok: Hm-hmm.
Andrew: If my audience is going to do this. What I mean is, this kind of interior shot is not the last time and not the last business it’s going to need to partner up of sell to small businesses across the country. Someone in my audience right now could have a hologram idea for how to hologram image every local business from rug stores to dentists, and so on. Or they might decide that they have a coupon business that needs to work with local businesses, or maybe it’s an [inaudible] business, or who knows what’s going to come in the future, but we’re going to have to work with all of these companies.
Mok: Yeah.
Andrew: The person in my audience who has that idea, he, I guess, could take away from this that partnership are better. That he should probably focus on one small city, maybe Austin, Texas or Boston or Boulder, Colorado. Focus insanely on there to learn as much as possible and then once they get it, don’t pay for a sales team go and partner up with an AT&T or someone who already has relationships with all of these businesses and become an add-on service that you get to up-sell. And that way you don’t have to focus on sales people.
Mok: Yes.
Andrew: Is that the way your recommend based on your experience?
Mok: One man’s opinion, yes.
Andrew: Okay.
Mok: If you do want a direct sales force, then you probably have to raise a lot of money for that actually.
Andrew: Okay.
Mok: I’m not saying that one is better than the other. I think there are companies that have 20, 30, 40 direct sales force and they are doing well. But there is really not that many of them, currently, now. I think as an initial stab, yeah, that’s really my take-away was that. And if I were to do it again, certainly we still need direct people to learn and keep the pulse of the market and I would highly, highly recommend that, because you do need people who are actually constantly talking to the merchant side of things. But soon after all that learning and you know how to pitch, you refine all of the marketing materials and the pitch, then you have to scale up. Probably the most cost effective way is to partner up with people who already have big sales forces.
Andrew: All right. That’s a big take-away from this interview. Now I’ve got to ask you what I brought up earlier in this interview. You’re really happy today. There’s celebration piping in from right next door. What is it that Where Inc. is celebrating today?
Mok: If you go to Where Inc., and merchants can actually claim there page, and what we do at Where is, merchants can go in, they sign up, and have an ad up, actually. And we can do all of that in about less than a minute or at least technically. The merchant will take them five minutes to fill out, but then they can put up a deal or ads and all that stuff. They can just shoot it up there with a click, then it’s up there. And one thing great about Where is that it’s a hyper-local ad network. So the merchants can actually go in and say . . . let me step back.
If you go talk to a lot of merchants and restaurateurs and all that, they know that they want the foot traffic. They want people to come in and people who are coming in to spend money in their business, probably is about, there’s a ten-mile radius of people that they affect.
Andrew: I’m sorry to interrupt. I want to make sure that I am very clear here. Where Inc. is different from EveryScape, he is now at Where Inc. And we’re now shifting the story to Where Inc.
Mok: Yes.
Andrew: So I can find out what he’s excited about. I don’t want people to imagine, well how do you go from shooting pictures inside and having sales people to suddenly you’re doing coupons. No, completely different business. I just wanted him to go back in time with me and talk about what happened a long, long time ago. How they experimented, what happened, and how they triumphed. Now that that story’s over we’re going to find out about Where.
I understand Where is the place, as an iPhone app that if I want to find a place to go grab a drink right now, I go to Where and I can find a bunch of bars around here, and you’re saying there’s something new that these local businesses can do for me?
Mok: Yeah. So to give you an overview of Where; you can think of us being to really efficiently connect local merchants and consumers. So that’s sort of the high level view. On the consumer side we have our app that’s on 12 different platforms from Android to iPhone to your foot phones, actually they have Where in them, Where app in them. The whole point of Where is to help people to discover new places and keep in touch with their friends and find out what’s nearby.
So that’s one line, consumer facing. On the other side have the merchant facing services and that’s what we’re talking about, I’ll get back to that. Basically who sign up find their page, put up ads, put up deals.
In the middle we have an ad network. We’re the largest local ad network in the U.S. according to Neilsen. What that does is, basically merchants can have an ad, an ad gets to the consumer by location. So let’s go to a specific case. So, I’m a merchant and I an ad on Where, I claim the page, I go and buy and ad on Where, and I’m going to chose, in one of the three packages that we have, and you can claim it, you can write your own copy. And the real power that is also the distance. So I’m going to say, I’m a restaurant, really people in about a ten-mile radius are my consumers there, so I’m going to interactively draw a circle around a map, this is my location, this is where my costumer base lives. And we have a big geofencing patent on that, as well.
So once you’re done and now I’m a consumer and I like, “Ah, I feel like going to get some burger.” So I’m looking it up. I’m looking for burgers and it turns out that from a burger joint merchant the ad comes up. So I’m like, “Come in.”
Andrew: If I’m within that area of the burger joint and I’m looking for something on Where, the burger joint advertises to me. But if I step away and I’m too far to walk over or too far to drive, whatever they decide that they want . . .
Mok: Yeah.
Andrew: I don’t see the ad, they don’t get charged for it.
Mok: Exactly. Exactly. So it’s . . .
Andrew: So there’s something else that you guys did today. I think I can talk about it, I’m sure I can talk about this.
Mok: Yes.
Andrew: This is with the coupon section, we can talk about that?
Mok: Yes. Yes.
Andrew: So this is another part that you’re really excited about. Now a merchant can say, “Hey, I don’t have anyone in my store right now,”, or, “I don’t have anyone for a drink right now. I am going to offer drinks half off, right now.” And like that, they offer it and like that anyone who’s on Where, who’s looking for a place nearby can see, oh, there’s half off on drinks over here, I’ll go to that bar. I’ll have my drinks. If too many people come they can turn it off just as quickly and, right?
Mok: They idea is, that that’s happening in real-time now.
Andrew: Real-time?
Mok: Merchants can sign up and press a button. We actually did a test here too, it’s like, Where Inc., a mile around, if you’re in here, a dollar for an unlimited amount of beer; Oh, by the way Where Inc. employee. But we put that out there and everyone was checking, it just worked beautifully.
Andrew: Cool. Cool. I like that. I can see that. If I was one of these restaurants or one of these bars where no one was inside, I would just suddenly pop up some kind of offer, at least to get a crowd in there. Even if it’s for five minutes say, ‘Drinks are a quarter; let’s get some people in here.’
Mok: Yeah. The pink point is that, like for restaurants and bars, right? It’s not about flash deals. It’s not about, “Oh, I got to go and spend $15 here to get $30 worth of food, but I’ve got to buy it now.” It’s great for the merchant, maybe. I don’t think they’re making any money on that, but that’s a separate topic. It could be good for the merchant, but for me, as a user. I mean, what does that mean, I buy and I probably keep and I might not even go there. So, you’re nearby you want to spend; we’re connecting the consumer who wants to spend money a burger, with the merchant who’s saying that, “I want customers in now.”
Andrew: I’m going to do a test right now. I’m going to load up my Where. But this isn’t a tech show so I’m not going to get too carried away with this, guys. Let me close the circle here.
Coupons, is that where I click to go see where I can buy a drink cheaply.
Mok: Yeah, you can go to coupons. But if you go to certain places, go to a place, a beer . . .
Andrew: I going to go “drink” and I’m going to go “all restaurants” and “Little Wayne.” No that’s a music ad. “Dupont Circle, Restaurants, Ten,” all right. I don’t see anything right now. I don’t want to get too carried away with this.
All right. I get the point. We’ll do tech support afterwards. Closing the circle though?
Mok: Yeah.
Andrew: At Where you don’t partner up to bring local merchants in. At Where you don’t even have a sales team, right? To go out? People are just discovering you. Local businesses are going online and recruiting themselves, no?
Mok: We do have a sales team. We’re growing that on the merchant side. It’s more of a support team. And we’re trying the really grow virally. Also, in terms of, philosophically, we want to partner up as much as we can as well. So anyone who’s has deal aggregators, we want to partner up. I mean, philosophically I think, the more the merrier.
Andrew: So how do you get the merchants recruited to Where?
Mok: Right now it’s fairly new and we’re asking them to sign up. We’re partnering up with Constant Contact, for example. Sort of an email merchant blast and trying to really help them claim their pages. According to Constant Contact it was one of the best campaigns that they’ve ever had, actually.
Andrew: How did you get the email addresses that Constant Contact sent out to you?
Mok: I don’t know. You probably want to a guy named Eric. But, I’ll certainly connect you.
Andrew: All right. I see how that works and I see why you didn’t need sales people in the early days at Where, because there was nothing to sale. You guys bought your data and you told all the merchants that they could claim their data, but at first the product worked even if they didn’t claim it. I can always go to Where and say I’m looking for a restaurant, I’m right here. You don’t need the merchants to tell you where the restaurants are.
Mok: Yeah, and the other thing is, we’ve acquired a company called LocalGinger recently, which is just deal aggregator space to really get a kick start from that area. But it’s still fairly new. We bought it four months ago.
Andrew: All right. I think I’ve got a whole lot of information here. This might be the only place in world where anyone can spend 45 minutes talking about the difference between building your own and partnership. I don’t care; there’s a reason I’m never going to make it onto national television. This stuff would never make it to national television. And I’m so fascinated by why a business goes one way or the other, what happens when they choose one direction, how do they shift to the other. These little details of business are only fascinating to people who are actually in business.
Hopefully for you guys this was useful. Thank you all for watching. And thank you for doing the interview with me.
Mok: Thank you.
Andrew: You bet. Good bye, everyone
