Growth Stories: Marketing Agency to Data Business
From marketing agency to software product business to data business – it is a transition that can create huge amounts of value today. I talk to Ben Harris, CEO of Decibel, about how he did it. There’s an odd side to the story. These transitions always provoke some resistance, but in this case the resistance came from an unusual direction – his management colleagues. How do you reorient a business while " being ridiculed" by your colleagues for wanting to do it?
Alastair Dryburgh: To start off, Ben, tell me a little bit about Decibel and what it does.
Ben Harris: Decibel is a marketing technology. It’s designed to help businesses improve the experience they provide their customers on their websites or their apps. We track everything that someone sees in the screen as they see it at that moment. We collect all of their interactions, how they move their mouse and how they scroll, into one single database. And from that, we then harvest a new set of metrics not seen before that help people to understand what happens between the clicks and touches on devices.
Dryburgh: So if I were looking at a website and I moved my mouse over and hovered around a particular button and then went away from it, and then went back to it and then went away from it and clicked off to another site altogether, you’d be able to register that.
Harris: We start to learn that behavior, yes. In the past, people have relied on traditional analytics, which tend to track clicks. Our technology tracks what happens between clicks and through machine learning reveals how visitors behaved, why they behaved that way, how they feel about those interactions and automatically flags if someone had a bad experience. Traditional analytics looks at things like bounce rates, i.e., visit the site and leave again, or number of clicks. We’re looking at things like that, but also the distance someone moves a mouse and the velocity of that mouse, the number of directional changes, the angle of those changes, the amount of page they expose, and the speed in which they expose it. And those types of metrics give us a new picture of what’s really going on. We can decipher the user’s state of mind. We can assess whether they’re really engaged – even down to reading behavior. We can also show if they’re confused and they moment they get frustrated. And so we’re starting to gain an understanding of both why people interact in the way they do but also how they feel about those interactions, which can enable companies to create a much better, more meaningful communication.
Dryburgh: And where did the idea originate from?
Harris: Well, I started a digital agency 16 years ago. We were trying to help clients to do a better job of keeping customers on a site, helping to convert them, and also encourage them to come back again. We were using Google Analytics and we found that actually even though there was lots of interesting data, it didn’t reveal what was really happening to customers. We felt there was a better way of doing it, so we decided to build some heat maps as a starting point. And having done that, the reaction that we got from clients was so strong that we decided to develop the concept further and have launched a Digital Experience Intelligence platform. The first ever. We’re also releasing a new scoring mechanism to help businesses understand what’s going on not just by seeing but actually by having a number to understand to what degree people’s overall digital experience is improving or degrading.
Dryburgh: Technically, how easy or difficult was it to do?
Harris: Well, there’s a number of things. One, is building technology. The second is creating a new company while one exists already. And the third was encouraging a change in direction for the company. And that was challenging, very challenging.
Dryburgh: Tell me a bit more about this, achieving the change in direction of the company.
Harris: We had to start by re-educating everyone on what this sector was. We actually were already doing most of the right things given our experience in and exposure to analytics. We just hadn’t really encapsulated it in those terms. And when people started to understand that, we said, "Well, 80% we’re doing. Now we need to learn that extra 20%." So it became important that everyone in the business was trained and understood the space, which we invested in doing. That raised awareness, and people started reading more. And then we bought an entire library of books and encouraged people to start taking them away and having a look at them. Some of them didn’t get returned.
Dryburgh: Am I right in thinking that you probably had a majority of people in the company who had come from a design, marketing or advertising background rather than technology?
Harris: Exactly. We were building technology already for our clients and we patched this onto it and then we launched the whole thing as a separate business and then we broke a little bit off. So there was a series of stages to get there, but definitely my biggest challenge was encouraging the management team, who were very embedded in the digital agency scene, to change direction and become more of a software company.
Dryburgh: I always tend to think in these sorts of cases, you’ve got three groups of people. You’ve got the group of people who immediately get it and get really enthusiastic and fired up. And then you’ve got the people who just really don’t like the idea because it’s not what they joined the company to do. And then you’ve got a group of people in the middle who are open to persuasion if you can make a case. So roughly, what sort of proportions did you have among those three groups: the enthusiasts, the resistors, and the middle?
Harris: We did already have a technology team building this stuff. They were interested because this was a slightly different way of working. We were building our own product and that was very compelling to them. So that wasn’t that difficult, and bit by bit, they spent more time on the actual product itself. As for the design team, I think they could open their mind to doing some of it. But then the account managers were busy doing what they were doing and weren’t necessarily that engaged with it.
But my biggest issue was with the management team, just showing them that there was a better opportunity for us by having recurring revenue rather than still working with clients on a project by project basis. They ended up throwing me out of the building, because I was spending more and more time on the new business. We moved our technology team into a separate building nearby and then they said I had to go and join them.
Dryburgh: This is quite interesting because the story you very often hear is the management team who get the new idea and then try to pull the rest of the company along behind. In this case, it was almost the opposite.
Harris: They fought me on it every step of the way. They told me I shouldn’t be doing it.
Dryburgh: And you were chief executive at the time presumably?
Harris: Yes, and by the way, after I left they said, "You‘re never here!"
Dryburgh: Carry on with the story. What happens next?
Harris: Well, having the agency business while we started a software business enabled us to bootstrap it effectively. We didn’t need any outside investment. We got the business into a place where we could go to market. We already had agency clients but we wanted to go bigger. So we started the brand for the technology in its own right—Decibel Insight. And we started winning some customers and learning about the business. And we got to a stage where we started to grow at a good pace. And we were starting to plan a bit more, be a bit more organised about what we were trying to achieve. And last year, we raised a $9 million Series A investment, our first institutional money, which was a big deal to me.
Ultimately, I had the realization that we were growing quickly and the numbers were quite big, so to sustain ourselves as we grow we needed to protect cashflow. I took some advice from a successful company that got bought by one of the large tech companies in the same sector as us. The ex-CEO had a look at my numbers and said, "Look, I think you can get through, but nothing’s guaranteed. You’re not sure. It will take a while to raise money. So if I were you, I’d get going." And after I heard that, it made me more confident that I should start the process.
And then once you’re in the process, it starts revealing just how useful it can be and what it can mean for the business if you bring on investors. It becomes a different business. You don’t start a business thinking I’m going to exit in 5 minutes. You think about building the business the way I did, slogging away for 15 years. When you start to raise money, the conversation right at the beginning is exit, which is a very different type of way of working. So if this is where you want to get to, we have to work back from that and work out our strategy for it. And through this process, it enabled me to start being more strategic about how we would get to that end point.
Dryburgh: Talk about a couple of specific things you did then to become more strategic?
Harris: Originally we were selling to mid-level VPs in analytics and optimization. And it was very clear from the investors that we needed to have a more strategic proposition that we could sell to a more senior level. We realised that whilst we had built the platform around a series of features, what was really interesting was actually the underlying data. We have data that no one else has. And we knew we had more modern technology. That gave us a unique proposition and with it the potential to create multiple products, but it also gave us the potential to create a product for senior level executives, which is where our DXS score is all about. It’s about giving senior level people a number they didn’t have before that they can use to assess their organisation and then a series of things that cascades down the organisation. It gives us a much stickier proposition.
Dryburgh: So you’re getting right into the backbone of the organisation and its reporting lines.
Harris: I think people often try to sell to a senior level stakeholder for them to then apply to their teams. We’re saying here’s something that can apply to your teams but also can apply to you. And you can use this as part of your overall dashboard.
Dryburgh: At what point did you separate the technology company from the digital agency?
Harris: Well, we thought about transitioning the digital agency to become the professional services arm of the technology business, doing some consultancy around using our product. But it was clear they were on their own route and it didn’t make sense to re-orient them around a different role. And then a lucky opportunity came up. Someone was interested in recruiting the director of the agency business. I happened to know the interested company so we had a conversation and he offered to buy the business. This allowed Decibel to focus on the one proposition, which is what we really wanted to do.
Dryburgh: This is a completely hypothetical question but it’s an interesting one. If you could go back to the early stages, would you have tried to separate out the agency business earlier or would you even have tried building the technology separately from the very beginning?
Harris: I don’t think having the agency held us back. I think it was an advantage. First of all, the skills and grounding that it had given us as a company because most companies are shy of user experience and understanding the importance of usability. And we had our own agency who were highly skilled and could design our interface from the beginning. For me personally, it was obviously challenging because all the time I was still being questioned for focusing on the technology side of the business. But ultimately, it worked out. I loved the agency business, but that said, it was the right move At a pivotal time for the business and I wouldn’t have done it any earlier.