Pre-program: Before we get started am going to tell you about three great companies, pick click is the first, it’s a one person startup from my friend Ryan in San Diego, pick click gives you a visual way to search eBay, [etsie] and other sites, Ryan is already doing one million product sales per month on picclick.com, not hits but sales go to P.I.C..C.L.I.C.K dot com to see how he is doing it. 99designs it’s the largest crowd outsource market place for graphic design, when I use them I wrote a description of the design I needed and how much I wanted to pay , I got a bunch of designs back, I gave each design a feedback and I picked the one I liked best and that’s the one I paid for, try them for logo design, if you need a blog design use them, if you need app icons use them, there are so many different reasons why you might want to use them. Check out 99designs.com and you will see why so many past mixergy guests have used 99designs.com. And grasshopper, I have had them now as longest sponsor for a reason, not only does my audience love them but you might here several guests here on mixergy say that they use grasshopper.com as the result of this messages and they love, it’s the virtual phone system that entrepreneurs like me love because it offers us multiple extensions, music on hold, call forwarding. It makes you just, it gives an impression of having a big profession organization but also cater to your need to travel and to be flexible. Check out grasshopper.com, here is the program.
Andrew: Hey everyone it’s Andrew Warner am the founder of mixergy.com home of the ambitious upstarts, you guys know what we do here, everyday I interview a different entrepreneur about how she built her business, how she launched it, how she evolved it, what she learned along the way and hopefully bring back those ideas to my audience who go out there and build incredible companies and then come back to mixergy and let me interview them about how they built there businesses. Today’s guest is Fran Maier, she is the co founder of match.com, one of the most recognized brands in online personals, today she is the president and founder of trustee, a leading internet privacy service provider and Fran welcome to mixergy.
Interviewee: How fun, thank you.
Andrew: So, it has been over ten years since you guys sold match.com, but it’s still a big name and it’s still attached to your biography, how much on an impact has it had on your reputation in your career?
Interviewee: Well you know it was wonderful to be part of the early internet days here in San Francisco and match.com was just round the corner for wired and in South Park and it was a great bill of fun. I actually joined in late 1994 and honestly at that point and time there really wasn’t online dating and I was certainly not [woke me up]. And to built a brand during that time and a lot of brand that were born in the 1995 through 1998 time period are still around and still doing some really great stuff, eBay for example.
Andrew: Absolutely, I mean there were pioneers back then who were really innovating and coming up with ideas, I was reading articles about match.com from back then and you could see that people in the match making business were scared even back then and then people in related industry were scared of how they are just going to be pushed out of the market because of match.com. It’s so interesting to go back in time and read what was happening and what people thought has their business and the world was changing.
Andrew: I bet, I mean honestly back then the primary way on personal was 900 number personals, which was very sketchy and very sleazy and you know we learned a lot about that. Then we were the high end dating services, but they were expensive and involved and so on. So what we did with match was create a whole new category, unfortunately we didn’t know it back then that we are creating just a whole new category called online dating but pretty much a rite of passage for most singles now dates. And it’s been transformation not just in terms of internet services but really into peoples lives, for example people I think date more just plain on date more than maybe when they did prior match.com and online dating, which means that there are many more people, there may be meeting other people to meet those people, they have opportunity to be more selective and I think it is a good things, we knew it was a good thing right away. The sad story is match was the, sort of the second child of a company called [elegy] classifieds and we were not really the board and the leaders of elegy classified were all about the classified market place and so they kind of didn’t really understand that match was creating a whole new category, a whole new business model and wouldn’t be the brand that it is today, so unfortunately its was so relatively
One of the things that happened when we went for profit is that we were able to build in technology and build in some relationships and so now we can do [ab] testing, in fact we can use a third party, just because that way our customers would recognize, they will learn to trust us, trust this third party and are experts in this. And we have a number of companies that some of the numbers are so high we don’t even want to publicize because people might believe they are not real. So typically we have seen increases from, if you’re a small company, there is a company called [debonreal] that saw thirty percent increase in sales, there is other companies called pro sports that went up quite a bit. Kitchen nit, a well established grant on shop kitchen aid went up something like seven percent.
Andrew: Just for having that seal that many of us see and are familiar with but maybe we don’t pay as much attention to.
Interviewee: It’s essentially through an [ab] test.
Andrew: I see and you can tell that way, wow.
Andrew: Going for profit, when you say that you are the founder of TRUSTe, you are the founder of the new, for profit TRUSTe. TRUSTEe as a business, true?
Interviewee: Yes, that’s true.
Andrew: So you guys raised 10.5 million from excel partners, what made you decide to go for profit?
Interviewee: So TRUSTe was doing very well and every year we were growing and growing and we were getting involved in more issues so I mentioned earlier that we were getting involved in email spam, in 2005 we had started to look at approaches to downloadable software and spyware and we were also seeing some competition from a company called [scanaler] they were known for their sale [hacker] save, which is now part of MacAfee secure. And they were willing to going out to the small business market very effectively with a much shorter sale cycle, a much quicker time to certify and something that was generating those positive returns for the companies that had that seal. So it was a combination of knowing that this was happening in the market place and that TRUSTe really needed, I failed to address those markets. Now, non profit board, mostly lawyers, some were reluctant to go there and so it took a long while. I would say I started the discussions in 2005 and it didn’t happen until, well we didn’t close until around 2008. What happened in 2007 is I got the board to understand that for the best impact and impact is what non profit or what it should be going after and for the best impact we had to be able to go after the small business market. That we would be marginalized if we were just with large the companies and without technology, without scanning, without product there was no way we could address effectively and scalable in a way that was scalable to small business market.
Andrew: Because of the way you work with the big market, with the big customers is with a lot of human work.
Interviewee: It was all men.
Andrew: All men.
Interviewee: In fact to raise money I had at that time, one just on the TRUSTe team.
Interviewee: Okay, in the past I might have had a couple of guides but there was some turnover. The other reason was that it keeps on bringing more privacy issues but the waiver staffed and even though we were cash low positive, there were no reserves, there was no way as in industry association, but we could get grants. And therefore if new issues happened, we probably could not participate because it would risk the organization. And we learned that because we did do a trust dialogue program, and it did succeed in terms of it ended up paying for itself, but I was unable to invest in front of the opportunity and I am sure we lost momentum in market opportunity because of that. And so the board was very aware of how hard it was, the way we were staffed and how hard it was and the fact that we succeeded or didn’t fail anyway, was somewhat of a miracle which meant that as a market organization we could take no risks, as a non profit we could no risks.
Andrew: I see.
Interviewee: And that’s not the road to really impact …
Andrew: As a full package you could invest in new products, you can go after new markets, you can have what you have now which is a certification program for smaller companies, $249 plus fifty bucks a month. $49 a month, you have thirty four hundred relationships.
Interviewee: Plus affiliate relationships, you know.
Andrew: Plus affiliate relationships. Here is also what I see about the revenue over the last few years, ’06 four point two million, ’07 five point five million, ’08 six million, ’09 last I heard was expected to be ten million but I don’t know if that’s, if that’s what you guys hit.
Interviewee: No probably, ‘09 was a tough year.
Interviewee: So that growth is not all that fabulous, as I said earlier if you take a look at it compared to internet companies.
Interviewee: But remember the growth from ’01 to ’07 was completely organic.
Andrew: In ’01 it was barely a million?
Interviewee: Oh, barely. Maybe, I usually take out the sponsorship dollars so it’s probably a million and some, but the sponsorship dollars went away with the dot com bus except for maybe Microsoft might have put something into.
Andrew: What do you think about the whole Facebook privacy issue? What do you think of Facebook’s privacy is what I mean.
Interviewee: You know Facebook is so innovative and such an interesting company and so it’s such a profound company, I was going to say like match.com but I think Facebook even transcends that and the whole point is to share some information. But we weren’t surprised when Facebook had the issue with recent updates and of course we were there along with everybody else saying, this doesn’t look too good and you guys have got to make some changes. And the goodness is that they did. They listened.
Andrew: Based on the changes they’ve made and what you know of them, would they get certified if they wanted to?
Interviewee: Oh they are certified.
Andrew: Oh, they are. Facebook is certified?
Andrew: Oh, I didn’t know that, okay.
Interviewee: So that’s why we had a relationship with them once that related to the changes that they made.
Andrew: Were you certifying before the changes and you gave them __ even though you were certifying?
Interviewee: They were certified and then they did the changes and then it’s okay, are you guys going to work in good faith to address these issues? And the answer was yes. And so they remained certified. And right now I’d say that we’ve got, we are working on the next version of the privacy statement just to make sure everyone is in alignment with it but my teams point of view is Facebook is in a better place now with the new controls and disclosures and settings that they have now compared to where they were before April.
Andrew: Here is something that I see a lot in articles about you guys, and it always feels like a pot shot, but because they envy you with this. You know what I am talking like I have The San Francisco’s business times, I have the New York Times, they end with a controversy. They talk about the business, how it’s growing, how you went for profit, how you are reaching other people and then they say, pretty much, of course it’s also not clear how tough TRUSTe standards are. It requires companies to disclose how they collect and use information but basically if I were to continue reading this what would come out with is, how can you really be a watchdog of a company that is also your customer? I turn that to you.
Interviewee: So there is a number of different examples of companies that do that. Auditing firms and security firms, all kinds of different places. What we, cases more often, is oh do they draw out enough people. The truth is we don’t let everybody in. so at least ten to you knowit ranges ten to fifteen percent of companies don’t make it through the initial certification, are not available to us for renewal. They do not want to make the changes that we ask them to make and perhaps we don’t see them again until they decide to get religion.
Andrew: And once they are in, is it hard to push someone out who’s contributing revenue?
Interviewee: No, we’ve pushed down a lot of companies. Sometimes across the range and there is different ways of pushing them out. So sometimes it’s a non renewal, sometimes we post, IM posted about this, juicy campers and classic close outs. These companies were not working in good faith, they were taking liberties with consumer’s personal information and they weren’t working with us to resolve it. freeipods.com. So you know we take the actions, our own philosophy is, we are better helping the company stay compliant as long as they are trying to do it. I think it would have been a mistake for example for us to say, Facebook that’s a no- no, seal’s off, because then we would not have come in and have an influence or be there to help them understand how their customers are interacting with things.
Andrew: I see passion as I am talking to you about TRUSTe. I see it when I read articles about you, when I see you in videos about TRUSTe, but [Devon] pointed something earlier on. He says, it seems that when you joined, I think you used the word, it’s having a job and when you were deciding where to go after match.com. You were thinking about what’s the better commute. How much of your business, the decisions of where you were going to go work is based on the passion for the business the product and how much is it based on the job and the safety and in it cold and calculating, not cold and calculating, the calculating.
Interviewee: You know I think it would depend on the year , so you know, you are right, 1994 when I went to match I was probably going to __ job that to do something risky and I felt I could do that. I guess after match I decided I want to go a little safer. Blue light was kind of fun and was a blast, you know it’s interesting and I think I stayed at with TRUSTe and probably did take it just as a job for the first couple of years and then this privacy stuff is a abandoned. Trust is really important as a marketer, I’ve always understood the importance of trust in relationship to brand. So it seized being just a job, I wouldn’t have been here and now it would have been just nine years if it was just a job. It was very important for me to change it in 2008 for me personally but more important there was not way, if I had walked away and I was you know seriously considering that because I wasn’t sure I could get the board allow me to go raise some money. Part of my sadness about making that decision was that I didn’t think TRUSTe would make it. And I felt that would be a waste of a really good brand and ultimately the board decided I think because they know I probably leave , was one factor and they knew that I need the talent, the money and the engineering to make things happen that I was able to stay and make it this work. This privacy stuff is amazing, and its renewal and it’s emotional and it’s important and we are all dealing with it right now.
Andrew: Do you have shares in the new TRUSTe?
Interviewee: Of course.
Andrew: You do. Alright now the future is __.
Interviewee: I had, nobody had anything.
Andrew: Nobody did?
Interviewee: Nobody did.
Andrew: How does that contribute to the passion? I’d imagine that would have a lot.
Interviewee Yeah, I don’t think anybody would tell you I was less passionate about the business what did in all meeting.
Interviewee: I was probably frustrated more. And it was about, you know I would tell you all the employees at TRUSTe now including the, probably we are close to two dozen where we would be TRUSTe as a non profit and two years later TRUSTe has a full profit pay on shift, but if you ask them what you know the people who certify website or people in sales what they are most exited about, sure they might mention the shares with the relive side about it is that they have tools now to do their job better and that really made some exited.
Andrew: We can see the business growing, the numbers of sites you are working with is growing, your reputation is growing. Well thank you for doing this interview, I’m really glad that I got to meet you, we didn’t, you brought it up in a couple of times but I didn’t get to go into the interview, I didn’t get to go into blue light and I was fascinated by what blue light did back when they offered that ISP service.
Interviewee: Yeah, that was __, your research is great.
Andrew: Thank you.
Interviewee: Send it to me, you never know what I have.
Andrew: It fairly good, quite an amount of time going over it and you know what’s interesting too, it’s just seeing how the world evolved over those years that you have been out there in business to see that there was one perception of the internet back when you started at match.com to see a change back when you join TRUSTe, the world was in a doldrums to hear stories about geocities back from back when you joined up, but that was a big company back then.
Interviewee: Of course, you know it has been a fascinating career, my kids I think have got a lot out it and clearly, you know regardless to what happen to match I know I got a little tied up that, nobody can take that away, you know so it was fabulous.
Andrew: Yeah, it’s a reputation builder.
Interviewee: Right, exactly, so okay.
Andrew: I will say this as stay on with me I will quickly say thank you on camera and actually I’ll ask where can people find you, how can they be connected with you if they wanted, stay in touch after this, is there a blog?
Interviewee: Sure, HYPERLINK “mailto:email@example.com”firstname.lastname@example.org.
Andrew: HYPERLINK “mailto:email@example.com”firstname.lastname@example.org, guys all thank you for watching am Andrew I will see you on the website.
extensively I think it was 1998 to [send it] who flipped over for probably ten times as much. A year later to [Barry Dealers] organizations.
Andrew: Let’s go back in time and just here, how the business evolved and learned what happened along the way. So you mentioned that you came in 1994 the concept came to a guy named Gary Cramen, he says “in his shower in 1993”. Can you take this story from there?
Interviewee: Yeah I went to Stanford Business School with Gary and he is a crazy guy. A very lovable guy and you know ’94 was pretty, ’93 ’94 was very early. Back in ’94 frankly I was at triple A and I was running membership marketing for California’s triple A club. And got my first email account ] got my first access to the internet and I was like, “oh my God this is going to change everything” Oh sorry about that. And met up with Gary at a business school reunion and I had done marketing at triple A and had called prior and he was looking for somebody who kind of do one to one marketing. Who knew how to market to, on a gender basis, so marketing to women or marketing it to men. And wanted somebody to make Match.com sort of the proved concept for online classifieds. So to that extent I really took the ball with Match, I left my triple A job. At the time honestly, I didn’t know very much about stock auctions, or what this internet thing was going to be. I kind of do it just did it because, well why not? This thing is going to be great. So you know at the time it wasn’t even really about the money or about any of that kind of thing. And immediately, so I joined late 1994. By early 1995 by Valentines Day we had a very rudimentarymatch.com online. We knew if things at that point, one is we were going to market to women and that we felt comfortable the men would know that that was a good idea and they follow. We were going to try and have real success in the bay area where there was a lot of activity having to go on with the internet. So we felt that that was you know lets get some critical mass. So we did a bunch of parties and movies advance and things like that. And we knew that for people to get matches we weren’t going to start with 20 questions, we were going to start with a few critical questions. And nowadays there is just no way you could enter into a, start a new match making service without asking a hundred and one questions really. And you know we learnt some things too, for example marketing to women doesn’t mean that you are just selling the service to women or have pink and purple color skin. It means that you know we had our own online dating safety person. And we don’t ask, we didn’t ask, all my engineers were guys and they said well we are going to match on weight. So what are the weight categories? You know numbers right? And I said “ No way men we are, lets use body type because if you are really you know, that’s a better way to go.” So from the very beginning we were ahead of the market place. We also focused on press and by virtue of getting press you know February of 1995, we basically were always the market leader and never really looked back.
Andrew: Alright I got a lot of notes here on what you said. I want to dig deeper I want to find out about press, I want to find out about how, how, I love using body-type instead of weight. I want to find out about some of those decisions. Let’s go back to how the two of you met. You were at Stanford Business School together, what was your relationship before you started working together?
Interviewee: Frankly of course. I remember meeting Gary I am sure he remembers this too. One of the orientation active days we had at Stanford and this was like going back to 1987. We had an orientations scavenger, hunter were in San Francisco, and Gary was on my team and sounds like you know Gary. Gary taught a mile minute and was both exasperating and brilliant. And you know that, its funny because Gary used to say, kind of an eccentric guy but he’s always been warm and a good friend, but I remember when I decided to drop my stable job to go to match.com I certainly had my husband’s body in but I didn’t tell too many of my girlfriends because I was afraid from business school, I was afraid they would kind of say no you got to be kidding I don’t want to hear that, I want to go ahead and do it.
Andrew: Kidding why?
Interviewee: Because Gary is a wild man.
Andrew: I see .[LAUGH]
Really, can you give me.
Interviewee: What is this internet thing and you know all the really good reasons why people shouldn’t take a flier and at the time my youngest son was not even a year old, or just about a year old, yeah.
Andrew: Can you give me an example of, or may be a story that shows why people thought that he was a wild man?
Interviewee: Oh gosh! You know well he’s got [hotspot], so for example I remember our time in a PR agency and Gary first he said to them is “how much are you going to pay us to do our PR?”, okay, you know, one thing I like about Jerry is he think big and so you know obviously that wasn’t a the answer they wanted to hear but it kind of pointed that where he is coming from and it was kind of aggressive.
Andrew: And beyond.
Interviewee: And when, I wanted the job so I recalled too, sorry for interrupting but I just start showing up at the offices and one night I bought pizzas, you know or Chinese food I think and that was a kind of a way you come in and grace yourself especially with a bunch of men.
Andrew: So you just liked the concept so much before you agreed that you are going be working together, you just stop by the office, you bring pizza, you take an interest, I see and then it finally you just made sense for the two of you and work together, the group of you, at that they are a few other people working on match.
Interviewee: Yeah probably you know six or seven.
Andrew: Wow, did you raise money before of after you joined?
Interviewee: Gary had ways to persuade and long was there and you know during that time period we probably went through four CEOs , we raised another couple of rounds, most of the rounds were from firms and VCs who wanted to get to into the classify market, so honestly they were not selling their advert on match.com, it seems you know, not that attractive to them, partially who knows we were to early, the idea of community on the internet was not well established, the idea of brand on the internet was not well established.
Andrew: I see and you don’t really need a brand name for classified that can fit in with others, I think I read an old article about how electronic classifieds would partner up with newspapers and set up __.
Interviewee: The idea was to be the back end, but as we know couple of things, you know hind sights perfect, is that newspapers were very slow to figure out what they were going to do and they didn’t really embrace the internet for the classified business really quickly and then of course there opting to do so was somewhat limited by the time Craig’s list and [many big] came to the scene.
Andrew: By the time __.
Interviewee: We set up a meeting and the whole thing.
Interviewee: When was last time you went to personals? I mean am sorry classified advertising on newspapers, you just don’t doing it any more.
Andrew: Never, I don’t remember ever doing it.
Interviewee: Right __ by the time probably got to 2000, so the market was moving very-very quickly.
Andrew: And what was the perception of dating of personals in general back then?
Interviewee: Personals especially very sleazy, sketchy, potentially unsafe. We knew that newspapers might put in 900 number ads suggesting that a woman was interested in multiple partners or other activities that, you know what’s psycho go into, just generally to general 900 number, phone number responses.
Andrew: I still see that today.
Interviewee: I guess so.
Interviewee: But if, and it’s all very interesting too because I was real inside into how the way people, what people want and how they go about it, so for example I talked about some of the few questions of course they were gender and age and all what you do for a living, and really height, body type, what we really learned I think the first few questions we added back, we added in were your interested in children, and we should have known right away that, that would been a really important question but it was a fundamentally important question. So we had to ask questions about whether or not you have children or want children or if your children are grown. Which kind of was [include] to us that people were pretty serious about using this not just to date but for long term relationships.
Andrew: I see, how then do you bring women into an environment like this that has such bad reputation that was associated back then with those 900 ads?
Interviewee: Right, so we deal with a number of things, first of all we didn’t call it personals, we called it online dating,
Interviewee: Okay, so very important
We were ahead of the [curve] I think in terms of addressing concerns that women would have. So for example it was anonymous, it still is anonymous, it’s probably important that dating sites remain anonymous and for the protection of women. We try to use…we try to make it a well lit place. So I remember the three words that we put around the grand positioning. They were safe, anonymous and fun. And we thought the safety one was really important. Anonymous of course just so you sort of reinforce that. And fun like come on in and see what happens.
Andrew: And by anonymous, how do you keep people’s anonymity?
Interviewee: Well they had to select a handle. Now do people really use their real name? They might have, how would you know?
Andrew: I see. And you targeted the bay area at first. You talked about organizing parties and events. Of all of those different things, what worked best for bringing people from the bay area in?
Interviewee: You know probably the B.C community. The internet community. There were so many parties and things like that going on and everything was so exciting. It was really tremendous and so I would say in the end it became worth the mile, you know. And …
Andrew: Sponsoring parties where the VCs] and the people in the tech industry were going you…
Interviewee: Or just by going to those parties and passing out cards and then of course press. Getting press was really important. And it was part of the story.
Andrew: How did you do that?
Interviewee: I prepared at the beginning .It was the novelty of it all. I think the focus on women was kind of interesting. So I remember I got a [opt ad] on the washroom post for targeting women on line. Forming partnerships so we had somewhere __ partnerships, in fact that’s was another way we tried to get community, so we did a partnership with women’s wire which later became women.com. And with a [reside] at home, and with…who knows what it was called then, I can’t remember. But we had so many partnerships and that sort of brought legitimacy too. So the global network navigator if you recall that, you were probably too young, would partner with trustee, I mean with match.com and that would be a good thing and then later probably in1997, I got a,match.com was partnering with the first trustee shareholders because anything I could do to reinforce trust was something I did.
Andrew: And the partnerships like the one that you had with the company that became women .com, what were they like? What was the structure of the partnership?
Interviewee: They were early affiliate partnerships. We just didn’t have a name for that back then. So basically we would create a co branded match.com experience that would that would take branding elements from the other partner website and they would introduce it to their membership and then later once we started charging we’d pay back a revenue share based on the traffic they delivered. And we would recognize that you came from that…that [type of] consumer so the emails might say thank you from women’s wire for joining in the match.com community. What was cool is nobody were on their, well I think yahoo were on their own community and there’s a story there. And…but most got that critical mass was the way to get…the way to get critical mass was not to have your own close community, but to bring your membership with everybody else’s.
Interviewee: So my story with Jerry Yang , he probably doesn’t remember me or that, was we had a conference and I was pitching to do a partnership with us. You know yahoo was growing very fast, we really do have something special for you guys. And he tells me, “We will never charge for anything on yahoo”. And at that point we had one of the very first payment models on the internet. Which was pretty cool. At the time it was just us and Wall Street Journal of any significance anyway.
Andrew: How did you decide the charges? This was, you launched in 95 , in 96 you [went] paid. How did you make that decision?
Interviewee: Well we waited first until we thought we had a critical mass in some key cities and if my memory is correct, we had about sixty five thousand people on match.com .Sounds very small right now I know but at the time it was big. And I know that we had it in San Francisco, New York, a few big cities that we found there was enough people. We also believed that by charging we’d qualify the daters’ war and…
And that was immediately evident. As soon as we started charging, the percentage of women went up from lets say, if I recall 10% to over, to almost 20%
Andrew: Oh wow.
Interviewee: Because that qualified the guys.
Andrew: Because they knew that the guys who were paying weren’t just hanging out weren’t just __ I see. They were making an investment in the relationship.
Interviewee: Right. Paying also helped with the distribution of relationships because why,you know why an affiliate partner typically if you are not going to get paid
Andrew: I see.
Interviewee: And it was cheap, I don’t know how much they charge now but I remember it was $3.99 a month. The other thing that we learnt very quickly was bundling really improved results in a very big way.
Andrew: How do you mean?
Interviewee: Oh by the way one of the marketing things we did was, we did search engine optimization and a lot of email. So it’s funny because now, I mean you know trustee and what we do you know privacy right, and for sure I was a spammer absolutely my teams spam.
Andrew: How do you mean? Tell me
Interviewee: Oh we would just send emails, we would try to find email addresses and just send them. Well you know to be fair if somebody opted out we didn’t honor opt outs am not sure we did anything that is not completely, yeah know they weren’t the tools that are now, to do online marketing. Now you look at the way that we do online marketing now trustee compared to, what I call the most sophisticated online marketing approach at March back in 1997 and we are talking completely different worlds there.
Andrew: Yeah you know what its true and also standards change what was considered spam, what is considered today, what’s considered spam wasn’t necessarily considered as spam back then and back then we weren’t sure what was going to be what.
Interviewee: Exactly. And some other things that we were doing that didn’t even have names. So for example Amazon got famous for their [affiliate] model but we were doing that before and hotmail got famous for the, you know the viral stuff by putting in the footer you got a hotmail account. Well of course we were doing that at Match.
Andrew: How did you guys do that at Match?
Interviewee: The same thing, you know, in the footer of the email
Andrew: If I was emailing another member then in the footer, it would say that, I see okay
Interviewee: Yeah, so yeah you know.
Andrew: Got you. And did we talk about bundling? You mentioned it and I think we didn’t get to cover that.
Interviewee: Yeah so what we learned it is for example I did a partnership with I think its called the Net Magazine. So if a customer Match want to sign up for a 6 months subscription at probably you know, $15 who knows, they would get a free subscription to the Net Magazine had nothing to do with dating right? But what the heck? And immediately you would see people would take advantage of that offer.
Andrew: I see that because you are giving them some, because you are giving them something else, the more likely to join.
Andrew: Were you getting paid by the magazine to do that?
Interviewee: No they were getting, I guess they were getting names or subscription, so maybe I gave them a little bit I can’t recall.
Interviewee: I don’t remember it was along time ago.
Andrew: I do remember the affiliate program being really big back then you guys were, because you charging you were able to go out and pay for affiliates, how did you find affiliates?
Interviewee: We had business development just like every other internet company that would go out and see who was, who had communities basically and so it was good working with them.
Andrew: Where did the idea for an affiliate program come from? Of course affiliate program is where you say anyone who sends me a new customer, will gets a share of the revenue that I make from that customer. So where did you guys come up that?
Interviewee: I would have to credit that to Gary.
Interviewee: And then Gary would look at me and at the time am like you know product manager and never really had this starving and he’d say “well this is part of your job” and I was like okay fine. And over the years, over the years I still like to do a lot of these developments. I like to do, I like to make deals.
Andrew: At the time there was another company called One and Only that was also out there soliciting affiliates. When did they come on? Did they come on before or after you guys?
Interviewee: You know I have no memory of One and Only other than, I remember there was a company, or a person called Russell [Resnick] who later went on to run an email company and did really well. But she was net girl on AOL and she wanted to do, AOL was getting off its paying forum leaders. She was making a lot of money she had a nice, nice environment going on there, she was making good, good money. And so she wants to start her own dating service and leverage her reputation from AOL. So she kept on telling us how she was going to beat us, beat us, beat us and never happened. The funny thing is she
one time sent an email our company one time sent an email to our testers or data members or whatever and they did not suppress the email address, okay, so no anonymity and I took advantage of that because we were signed up because we were watching the competition. And match.com then sent an email to all those people whose anonymity was threatened and said “well this is wouldn’t happened at match”. Now it’s kind of ironic though, because Roselyn was very angry at me. Roselyn went on to start an email company.
Andrew: Yeah and that what she became really big for and for and fighting scammers and for creating a double opting email list. I think they invented a blocked in. did you guys ever talk again after that? Did you do any work together?
Interviewee: Well, we had a,we were at a [neck] girls meeting in New York and she was very aggressive and angry at me, and that was interesting. And days later of course we got to go, I hired somebody who worked for her so we connected over a reference chat and it was fun.
Andrew: I see, do you remember who that person was?
Interviewee: Colin O’melly
Andrew: I remember Colin vaguely. Roselyn is a good friend I remember her back in the days.
Interviewee: oh, okay, so does that surprise you?
Andrew: No, I actually don’t remember her being in the dating business at all. But I know your company and I know her and I know that you guys weren’t just going to stand down and wait for something to happen. I remember you guys were out there building and you were fighting hard. I admire that a lot.
Interviewee: It was fun.
Andrew: How was it? Was Yahoo in the business before you guys sold in the personals business, no?
Interviewee: No, I don’t know that they got in for a while later and of course they quickly moved to number two position.
Andrew: I see. Was there any push back when you started charging?
Interviewee: Yeah, but you know we still had a free registration so you could do a free trial period so as long as you could try it. And that was important, I’m not sure what the rules are now. We did find that we were ,if you did a demographic slice, we were more likely to get subscribers, for a man, of over 29 and for a woman over 26, if I recall. There seemed to be a much higher propensity to pay once you were a little bit more into your twenties. Which, when you think about it makes sense.
Andrew: I see. Right. You got to sixty five thousand users before you started charging, once you started charging, how did your growth rate get impacted?
Interviewee: You know it still kept on growing, it really didn’t slow down
Andrew: Faster, the same.
Andrew: Did it go faster, did it stay consistent?
Interviewee: You know we were growing very quickly all the way through. Now of course the internet was growing very quickly and were a big part of that so it is hard to know exactly I’d have to go look at papers to try and figure that out.
Andrew: Okay. You also said that you were one of the first to …
Interviewee: We got to over a million, you know, not that long after so
Andrew: So you got paid in 96 maybe by 97 you had your first __
Interviewee: It wont be the 95 and by the time we sold in 98 there was a very large database so.
Andrew: I see. Did you got paid in 95 not 96?
Interviewee: oh, maybe you are right, okay, sorry 96.
Andrew: SEO, what kind of search engine optimization did you do back then?
Interviewee: We didn’t do any.
Andrew: Oh you didn’t, I thought you were getting some traffic from search engine.
Interviewee: I’m sure we were but the idea of search engine optimization! No!
Andrew: Okay, alright. I don’t think it was until the year 2000 or so when that became big.
Interviewee: Following with the, with Google and in some __ with it now, and I mean again I have a much more sophisticated online marketing department now at Trustee and I am amazed. How different itt is.
Andrew: Let’s keep talking about matching and I want to ask you about Trustee and I also want to be fair with your time because I know you got to catch a flight. Lets see what else there is here. The sale, the sale wasn’t of the whole business, it was just of match.com, right?
Andrew: Can you say how much it was for?
Interviewee: Less that 10 million.
Andrew: Less than 10 and over six million is what I saw in different press reports.
Interviewee:Yeah, that was right. It wasn’t enough.
Andrew: How was that decision made internally?
Interviewee: Again at that point the focus of the investors and the board was on, not on online dating but on classified market and we sold in late 97 there was a little bit of a down turn, believe it or not.
Interviewee: Well yeah you know it was a poor decision although I think that team was not committed enough to the brand or the community to have made it successful so even then, even though we were paid and we were, well I’ll tell you the truth, Match.com in 1997 was profitable. Yeah it sounds good but actually that’s idiotic. We should have been spending a hell a lot of more money in investment in database, and cross marketing and then in relationships and advertising. But the mindset was that it was a cash cow for the rest of the operation. So I look at that and I, well you know like my teenage boy couple of Valentines day ago saw a Match, was watching me watch a Macth.com commercial on T.V and he says to his friend, “Oh no mum’s going to get all bummed out now”. Because, you know look. So here is the deal we sold it for too little , we didn’t invest enough in the business before we sold it. it was still growing, it was making money, it was a brand leader, it was changing the way things, people were doing things online and we sold it for less than $10 million and I got out of that virtually no cash but I’ll take responsibility that I probably could have, put the guarantee with the investor group and take it over myself. Frankly I was exhausted. I was beat up you know, almost everyday for Match.com within the company because the rest of the company and the management team was all about the classifieds. And so I was knocking into this court, I was always having to fight for money and technology and other resources. I had two small children and I let it go!
Andrew: Was it also the investors who were pushing or was it the
Interviewee: Oh no it was the investors, yeah
Andrew: Gary too at the time he was pushing?
Interviewee: No Gary was out of it and Gary probably, I know Gary encouraged me to try and either go with him or go with somebody else and do it myself. And again my children were very small, I was very tired. I certainly had no insight into how the internet would be and I let it go. And I even turned down the job to go with send it partially because at that time they were going to move to Connecticut and I didn’t want to do that. So I look back that and it was a learning opportunity for sure.
Andrew: I see it actually in your face you are describing it. it’s painful to look back on it
Interviewee: Sorry. Yeah it is.
Andrew: Wow. So how did that impact the rest of your career at that decision?
Interviewee: Well you know am sure in ways I guarantee that really we cannott. But, and see yourself at the beginning I stylish a reputation at that point certainly establish a lot of relationships with a number of different movers or shakers across the valley. I definitely was credited with building that brand which is you know noxious to be affiliates or you know with just everything. You could feel the value of preposition the targeting and all of that. So I was very employable. So by the time I got to 1998, early ’98 I had a number of different job offers but certainly opportunities I could have pursued. Now I am not trying with the right choice, I worked with Women.com who I mentioned earlier. I turned down eBay. Partially it was too long to commute and I wasn’t necessarily going to be BP. I look back at that now and think that was sort of silly. I probably could have looked around and done some more things too. But then, and Women.com was great, it was just not as the biggest as the success as I would have liked it to have been.
Andrew: Why not?
Interviewee: I don’t think we had collectively as an [answering] team a clear enough sense of being a media company and what that meant versus being a community, what, i-village versus being a technology company. And without having a clear sense of what our purpose was and what kind of company we were, it led to not executing as well as I think we otherwise could have. As you know, and this is true with merging as well as anything else, timing is everything. You know, had we held on to Match, even the number six Match probably would have got a heck a lot more money and maybe have thought differently about it. Women.com went public in 1999 but late ‘99, so by the time of the shares were
Interviewee: …Have a lock out, it was dot com burst. So you know timing is everything .
Andrew: Why didn’t you start another company? Why didn’t you launch a company after that?
Interviewee: I felt I needed some more experience and I felt that I could add to other teams just as well.
Interviewee: I didn’t quite found my own company actually until 2008.
Andrew: With a trustee?
Interviewee: With trustees [commercial], yeah. Which was sort of like a do over.
Andrew: Speaking of match.com, the company was already there, the idea for the site was there and I think you said you’d gone through several CEOs but you still considered a founder of the company.
Interviewee: No, at the time there was only that initial seed investment.
Andrew: Okay, so there wasn’t CEO, it was just the seed.
Interviewee: So when I joined there was Gary. So Gary and I were, in terms of match, well there some other things developed, match really wasn’t developed t.
Andrew: What do you mean? Oh I see, okay so match wasn’t a site developed but the idea that they hoped would become jobs.com and housing.com and all the classified it.
Interviewee: Yeah, the classified strategy was in space. It was in place to some degree. Match.com in terms of the site, a brand and so on..was not really in place until I got there.
Andrew: And you didn’t get to cash out from that because you didn’t have shares or why?
Interviewee: No, the preferences were really not such that anybody really got much money. I did, you know I got some bonuses for helping sell it, I got bonuses for helping to transition it so yeah, you know I got a a bunch of singles but it’s less about the money, it’s more about, man I should have taken it further along.
Andrew: I see. JB in the audience agrees with me that match.com was a great name. How did you guys the name, match.com?
Interviewee: You know I have to then credit Gary. Gary bought all kinds of names.
Andrew: Oh, really?
Interviewee: And so, you will have to talk to Gary but he is most famous for sex.com and his fight for getting it back from a squatter.
Andrew: I think he might be due to come here to mixergy to do, Jen is incredible. I don’t know how she meets these people. She is the one who introduces me to you and I think she is hooking up an interview with him.
Interviewee: Oh, you have to be introduced to him too.
Andrew: I am sorry?
Interviewee: I’d be happy to introduce you to him.
Andrew: I’d love it. Are you guys still friends? It looks like you are still close.
Interviewee: Of course, yeah.
Andrew: Okay, let’s talk about TRUSTe, what was TRUSTe when you signed on?
Interviewee: So dot com bust 2001, I had spent about a year at bluelight.com which was K-mart and yahoo and softmaid and things were just kind of falling apart especially with K-mart and __ store, long story. Anyway, so I was looking at the next thing to do, there were not a lot of jobs, I wanted the top job and I knew some of the board members because at match we were one of the first TRUSTe shareholders, well the first clients again to reinforce TRUST. And they invited me, so I was close to a couple of board members, friendly and they invited me to join in and frankly, so I joined in August of 2001, I don’t think the board understood how bad things had gotten so they had, my predecessor hadn’t been there for six or seven months, one of the board members was trying to run it and things were falling apart very quickly. I joined it basically because it was a job, but the board was not, did not even have a good sense of what the financials were on some of the basics. Like the first board meeting was supposed to be on September 11th 2001, of course we didn’t have it that day. But a couple of days later my message to the board was, I wasn’t sure if we were going to make it through the year, but as far as I could tell we had maybe a thirty percent renewal rate. That our backlog of certifications was through the roof but we still had to cut staff from twenty three to about fourteen. That I was going to hire a new head of sales and a controller just so we could start to find the money. And I suggested that we, that if they could do anything, I would appreciate their help. And that was, I, think for the first six months of TRUSTe when I took over it was really survival mode, a lot of triage, it was just determining who, doing everything from telling the marketing guy not to focus on
Policy was to focus on helping sales. And helping sales really focus on large plants, because if we start with small plants there is no, we would never be able to get ahead of the curve. And… go ahead
Andrew: No I am here to hear from you so you go ahead and I will come back with the questions.
Interviewee: So but by the time, end of 2002 we were seeing some revenue growth, we were seeing some renewals comeback, we would have an increased prices, we had to fix some of the worst technology issues that we had. And I recognized that we had a brand. So we started looking at things like, what we could in the e-mail space and whether other kinds of partnerships we could do when, and it started to grow pretty rapidly, organically such that by the time we got to 2005, I think trustee was you know $4,million. And that’s without any, when I took it over in terms of paid revenue, for the certification it was less than a million dollars
Andrew: And that’s where the revenue came from, from tangent companies to certify that they had the proper privacy policies that proper __ policies and to overall make sure that the consumer was protected. Anyway charging the companies, and they were charging the companies for this certification, when you say that 30%, that you guys had a 30% renewal rate that means it only 30% of the people who were paying, came back again to pay the next year which is horrible, horrible
Andrew: And then a back log of certifications may have been worse.
Interviewee: Some of those companies might have gone out of business because it was dot com burst
Andrew: I see. Okay
Interviewee: Right, so consider now with the recession, or the big recession. My view is in the bay area the dot com burst was worse than this past recession, Maybe it’s more like what this past recession is in New York or something like that. So yeah, know some of companies might just got out of business it was impossible to know but things were pretty pitiful.
Andrew: In some ways that’s even worse because it means you can’t do anything better to go and regain their business because there is no business to regain.
Interviewee: Right so it was really a focus on strengthening the brand, making sure that company is in we were serious about turning around, I don’t remember seeing Disney, and Disney wasn’t sure of the value. And they told me that my team was inconsistent and rude, and I you know I asked them, I said am really hearing you and I really want you to stay with us and I will address this, but if I don’t I completely understand and the same remains to the customer.
Andrew: Oh wow. How do you give them value, what is the value that they get for having that seal on their site.
Interviewee: So Disney is a very well large established I’d say just like Apple a very trusted brand. Right I mean, and they understand that brand trust is a very important part of their value. So I think Trustee brings equities of privacy that you might not have with the Disney brand. Most of our companies say that they enjoy that plus the benefits of feeling like they were one of the leaders in terms of privacy or that they are compliant with certain regulations. So I believe that Disney has a children online privacy protection, say [harbor] and then they actually have a [e-music] harbor . So those kinds of things are important to large companies. Small companies will see the benefit, especially but large brands as well especially trans-national brands in terms of the lift in registrations or transactions or better information.
Andrew: You were able to show, actually before I get to showing our conversion rate increase, did Disney brand, is it enough for parents to just trust? Are parents even familiar; are consumers familiar with the trustee brand enough to understand what kind of protections they get from it? How do you know?
Interviewee: I am thinking general ways they are they know what is about personal information. We know that if they put, if commercecompanies put trustee next to a security seal, that consumers know the difference, roughly, and yeah of course people trust Disney but its an added level of assurance. And again the large companies probably are interested in bringing that equity in am not sure they are mentioning the impact of trusting on their programs directly, but they’ve told me that they feel it’s another important way to assure the consumer.
Andrew: Do you have any data to show increase in conversion rate or awareness in the consumer market?
Interviewee: We have a, well it’s interesting so