On the Third Try, a Dot-Com Charm?
By Faith Keenan
Carol Fitzgerald must be a glutton for punishment. This mother of four-year-old twins who has been through the dot-com gauntlet twice -- most recently at the e-mail services provider formerly known as mail.com -- is trying once again to get a Net company off the ground. This time it's BuzzBack, a year-old online consumer research firm that rests at the cusp of a corporate shift to querying consumers electronically.
Call it daring. Call it nutty. For Fitzgerald, it's a matter of love -- of technology and innovation. The 36-year-old English and French major was hooked during her college days at Dartmouth. The college in Hanover, N.H., was a beta site for Apple Computer. So Fitzgerald received one of the original Macs, which came with company founder Steve Jobs's signature etched into the case.
When her first employer, a small ad agency, sent her to a Macworld Expo in 1988, there was no turning back. "I fell in love with the software industry. I wanted to be in high-tech, working for a cool software company, and live in California," she says, at a clip that would rival a New York taxi driver's speed.
NEAR THE EDGE.
She may be close to fulfilling at least part of that wish. BuzzBack, located in offices that overlook trendy Union Square in Manhattan, has way-cool roots. Besides Fitzgerald, its owners include Ron Rentel and Sylvia Stein, founders of a small, 10-year-old research firm called Consumer Eyes that specializes in product development and innovation. Each holds one-third of BuzzBack.
The trio is as close to the cutting edge as researchers get, say some clients. "You can get 20 firms to report trends. But Consumer Eyes is able to generate and refine ideas" based on the research, says Dennis O'Brien, a division president at ConAgra. O'Brien worked with the company several years ago when he was at Campbell's to develop V8 Splash. "They figure out what to do and actually execute something tangible from a product standpoint. It's something you can take to market as opposed to a nice presentation."
One of the recent trends they've latched onto with Fitzgerald is online research. Though still tiny, the field is expected to grow about 70% this year, to $439 million, according to Inside Research, a Chicago-based newsletter. And double-digit upticks are likely to continue as more companies become convinced that geeks and kids aren't the only people online.
"In 1999, the Web started to reach enough of a mass that the Web population started to look like the U.S. population," says Jim Spaeth, president of the Advertising Research Foundation, a trade association in New York. Being able to draw from a scientific sample means online research results are as reliable as offline studies.
Now that they can trust the results, plenty of members of Corporate America are turning to the Web to help cut research time and costs. It's especially critical for consumer-products companies that have to spot trends and get new products onto store shelves fast to stay with or ahead of the competition. Coca-Cola decided last fall that its flagging Powerade brand of energy drinks needed a makeover. It was urgent: Archrival Pepsico had announced plans to buy market-leader Gatorade from Quaker Oats, and Coke wanted its revised product in stores before Pepsi completed the acquisition.
Coke hired BuzzBack to use the Net to query about 100 teenagers about what they might like in a sports drink and what names appealed to them. They voted yes for an energy-drink concept but panned proposed names like P1, P2, and P3 that stood for different levels of energy.
SMALL BUT PROFITABLE.
Rohan Oza, the Powerade brand manager, says using BuzzBack sliced the time and expense of product-development research by 50%. Answers came back within days rather than weeks. "The method is great for getting rapid feedback and turnaround on ideas and concepts," says Oza. "From a timing and cost standpoint, it's a more efficient way of obtaining feedback from target consumers" than traditional focus groups.
BuzzBack is counting on endorsements like those to help build its business. Fitzgerald expects revenue to reach $2 million to $3 million this year and rise to between $10 million and $20 million by 2005. Yes, it's small. But BuzzBack, with just five full-time employees and 10 software developers under contract, is already profitable on an operating basis, says Fitzgerald. She and her partners would rather be small and profitable than huge and broke.
Fitzgerald knows what the latter feels like. Her most recent online post was as senior director of product marketing at mail.com, the e-mail service provider that has since morphed into EasyLink. That company's shares are now trading at less than $1. Fitzgerald left several months before those deals. "My options ended up not being worth anything, but look at how much I learned," she says.
. It wasn't the beginning of her on-the-job training. Before mail.com, she spent nine years at Acco, an office-products company best known for paper clips and Swingline staplers. Fitzgerald tried to help move the company onto the Net by putting its paper organizers, called Day-Timers, into an online calendar that would allow users to pull in other events, say Yankee baseball games or Broadway shows.
The first time the company tried to load the homepage, it took 15 minutes. That was reduced to 17 seconds, but still an eon in Net time. The team sought a buyer for the service, but lost out to rivals When Inc., which was bought by AOL in early 1999, and Jump Networks, now part of Microsoft.
The plans for BuzzBack don't include an IPO or possible sale to another company. Fitzgerald has been there, done that. "I'm not going to get rich off of it," she says. "It's the challenge of doing something that hasn't been done." That's keeping her in the Net game.
Faith Keenan covers technology strategies for BusinessWeek in New York