13 Days Without a Word–hey, I’m Focused

I started blogging in November 2003. I think 13 days without a post may be a record for me. (There may have been one time a couple years ago when I was switching blog platforms where I also went this long or longer without a post.)

My regular readers know how much I enjoy blogging, how I think every CEO should blog, and how much value you get when you participate in open, online conversations about all kinds of topics. So a 13-day stretch without posting indicates how incredibly busy and focused I have become recently.

To make up for the 13 days without a post, today’s post may be my longest post ever.

And unfortunately it’s about my current business–not about internet marketing or entrepreneurship in general. So if you only read my blog for tips for internet entrepreneurs, you may want to skip this post.

In business you need to balance your time learning and networking with time executing. And lately we’ve been focused on executing. Our top priorities include: 1) closing our funding round, 2) acquiring content, 3) online marketing, 4) creating a sales and support team, and 5) business development.

Funding

Our fundraising effort started last December when I attended a FundingUniverse.com Speed Pitching event. In 2 hours I met with 8 groups of angel investors (a total of 20-25) and gave each group a 5 minute pitch followed up some Q&A.

I know most of the angel investors who are active in Utah, so this event wasn’t so much a chance to get to know people, as to tell them my plan to focus on running one company. I have a reputation for having too many ideas and not being able to focus on one thing.

This reputation was earned from 1998-2002 when I stepped down as CEO of Ancestry.com (we hired my brother to run the company and raise venture funding for us) to become VP of whatever area I felt needed to be started or improved. As a founder of the company, I was given a lot of freedom to do what I wanted to do. So I went from marketing to corporate development to strategy and back to marketing.

I wasn’t a primary decision maker, so I felt free and I had time to explore new technologies, new internet marketing tactics, and to network like crazy. I had an incredible experience living in Silicon Valley during 1999-2000, and I really gained the business education during these years that I never had in school. (I was a Russian major in college.)

What I didn’t realize during my Ancestry.com/MyFamily.com days was that some managers in our growingly bureaucratic company did not like innovation or change, at least not rapid or constant change. (They probably all needed to read “Who Moved My Cheese?” and I probably needed to slow down.) I was viewed as a chance agent with a new idea every day, and I didn’t realize until 2002 what a negative view some people had of me. One mentor explained to me that not everyone loves new ideas, even if they are better than the current plan that you are working on, so he suggested that I keep my ideas to myself or to a small team (engineers mainly) who loved to hear about the new, new thing. During my final six months at the company I was VP of Marketing, and I really focused. I apparently did a good enough job that I was offered the Chief Marketing Officer position if I would commit to two more years.

But I was ready to move on.

In 2002 I started 10x Marketing, an online marketing agency, and we jumped to 26 employees in six months. We had some great clients, but we actually grew too fast, and didn’t have the systems or teams in place to effectively service all our clients. We bit off more than we could handle. We lost a couple key clients and had to cut back. It was really painful. At that point I decided to hire a great manager to run the business, and I decided to move on. 10x Marketing became profitable very quickly and stayed profitable. We were voted by Connect Magazine readers in Utah as the top internet marketing company, second only to Omniture. In June 2005, the company was sold to Innuity, which is now publicly traded.

My reputation as an idea guy but not a business operator was reinforced as I started a few more companies over the past three years, including FundingUniverse.com that I mentioned above, and invested in others.

So back to the December SpeedPitching Event.

Investors always want to know about the market opportunity, the team, the strategy, and they want to see traction–evidence that you will succeed. We had a little traction, since we had launched our web site last June and had started selling subscriptions in October, so we had some revenue.

But the main thing that seemed to be on investors’ minds was: are you really going to focus on one thing? Can you really do that?

I tried to reassure them that I in my first 8 years in business I was a focused CEO. So I have done it before. Plus, I told them that this genealogy/family business is really my greatest passion. I only left Ancestry.com/MyFamily.com because the company abandoned our vision to create a free web site/intranet for every family in the world and the role of the founders had been greatly diminished. In my way of thinking, our genealogy business was important, but connecting families through technology was even more important–10 times bigger, I used to say. In the end, everyone disagreed with me, so I felt I needed to move on.

The simplest way of stating my position is to share the fact that 7% of adult Americans are involved in family history research, but 95% say it is very important or somewhat important to stay in touch with family members. I think the emergence of social networking sites, photo sharing sites, and blogging sites, which often have a good deal of family content, indicates how universal the need to communicate with family really is. I think social networks for friends (Facebook, MySpace) will get far more usage than social networks for families (MyFamily.com), but social networks for families can become a part of a person’s entire life experience from cradle to grave. I don’t think they will come and go every few years like social networks as younger folks adopt the latest new thing for their generation. I think family social networks, once established, will remain forever.

Genealogy may be the single most important element that can tie families together, to create the online social community that will never go away. In the early years of MyFamily.com we had tons of sites created that were single person sites. This was a big problem for us. Some people apparently wanted to start a family site, but never got around to inviting anyone else to join it. Sites with many members were almost always active. And to prove the point about genealogy: at one point we learned that 95% of sites that had a family tree and at least one photo online were active sites. Sites with photos but no tree weren’t nearly as active. It seems that it is the genealogist in the family (and nearly every family has one) that keeps the family together.

So I have been successful this year in convincing investors from Silicon Valley, Utah, and Asia that I actually can and will focus on this one company, and that despite the exciting, competitive environment that exists in online genealogy and family social networking, that my team will create a valuable company. We’ll make a more detailed announcement in a week or two. It will be nice to have our bootstrapping startup phase behind us as we enter in our growth phase.

ACQUIRING CONTENT

Genealogy experts are expressing amazement about the amount of content that is becoming available online. FamilySearch has made recent announcements about how it will partner with commercial firms (we are an early partner) and archives around the world to bring billions of records online. TGN’s CEO has stated that the company has spent $100 million in the past ten years digitizing genealogy content. Google is investing more than $100 million in its book scanning project, with much of that content having significant historical and genealogical value. MSN is doing the same. Footnote.com and other companies continue to invest heavily in digitizing microfilm collections.

Our own data collection will exceed 400 million records shortly and our pipeline shows us getting to a billion records by the end of this year. With funding and more revenue, we look forward to joining the “billions” club in the future.

We are trying to purchase the definitive guide to genealogy sources in each country and to find experts for each country to help us identify collections that should be or already have been digitized.

ONLINE MARKETING

According to our Omniture reports, Worldvitalrecords.com had more than 200,000 unique visitors last month and we should reach 250,000 unique visitors this month. We’ll sign up our 10,000th subscriber this month. Our affiliate program is growing and our Google and MSN marketing campaigns have been doing well lately. Some of this growth comes because Google has indexed so many of our pages and we finally started getting high rankings on some important keywords. So our SEO efforts are starting to pay off.

We offered a 7-day free trial last week for the first time (no credit card required) and had thousands of people sign up for our trial and for our weekly email newsletter. We are now monitoring the conversion rates. We are also working to identify other ways to grow our e-mail lists into the hundreds of thousands.

SALES AND SUPPORT

Our new manager of sales and support is setting up phone systems, interviewing sales and support personnel, and making phone calls to customers and potential customers. The energy level here at the office has doubled in the past month because of the sales and support team.

It is difficult to make phone investment decisions. We’ve got some Avaya options and some VOIP options. We want our system to be scalable, potentially to hundreds of reps, but we don’t want to invest too much too soon. We also want our phone system to tie into our CRM system, and we’re looking at various options there as well.

Most of all, we want to be up and running with a full inbound/outbound team in the next few days, and it looks like that will be happening. There is no substitute for talking to real customers, and we plan to invest heavily in doing that.

BUSINESS DEVELOPMENT

Most of the 100 priorities in my CEO Strategic Plan (a Google document that I share with my management team) are business development related. There are thousands of genealogy societies, hundreds of national archives, and hundreds of genealogy software and publishing companies (and other content owners) that are important players in the genealogy industry.

Similar to the business philosophy in Wikinomics, our goal is to partner with many of these organizations and to create a genealogy ecosystem where we and our partners succeed. In the past, the network effect has allowed companies in some industries to enjoy a winner-take-all position.

eBay, for example, made it extremely difficult for any other online auction company to compete. eBay had the most sellers, so all the buyers wanted to go there. And it had the most buyers, so all the sellers wanted to list there.

In the case of online auctions, eBay winning didn’t mean that an entire industry lost. Online auctions was a new industry, so while there was a survival of the fittest race, the losing companies were mostly young venture backed companies, not companies that had been operating for many years. (Although I admit I don’t know the impact on flea markets or physical auction houses.)

Having one winner has been both good and bad. Good, because this online auction platform makes it easy for millions of buyers and sellers to conduct business easily. Billions of dollars in goods are sold every month. Bad, because eBay, lacking competition, has raised fees over the years and has not been as responsive to the needs of its customers as many would like. Real competition is usually good for customers, unless the winning company has a rare philosophy, like say Craigslist, which doesn’t take advantage of its leadership position to change its original policies in order to extract more from its customers, but continues to pursue the primary goal of the company which is to provide a great service to its customers.

But in the case of the genealogy industry, there have been researchers, and publishers, and authors and software developers working for decades to provide valuable tools and aids for genealogists. So if a single company wins by attracting all the data and all the researchers then most likely, many of the other companies in the genealogy industry will lose, unless the winner gives them a piece through partnerships and royalties.

When we founded Ancestry.com, we had less than $1 million in revenue while our biggest competitor had something like 30 times that much. Over time, our strategy put us in the leadership position in the industry, and we were able to consolidate the industry by acquiring Rootsweb and (after I left the company), Genealogy.com/Family Tree Maker.

I feel strongly that our original company Ancestry.com/MyFamily.com vision and philosophy, like Craigslist, Google, Facebook, and Wikipedia, was about changing the world rather than owning an industry. But I suppose that any company with investors, especially venture capital investors, whose business includes generating the highest possible returns on their investments, is going to be under pressure to increase revenues and margins.

Google’s IPO was very controversial because the Founders insisted on maintaining voting control over the company, like the Washington Post. But they pulled it off. This may be able to insulate Google over the long term from making decisions that will be good in the short term but bad in the long term.

Craigslist has remained independent and still has a very small staff. They have completely disrupted the classified advertising business, but they continue to remain small and focused on delivering a great service. They don’t feel a need to own the world.

Mark Zuckerberg of Facebook reportedly turned down an acquisition offer by Yahoo of nearly $1 billion. One VC commented:

At the iMeme panel last week I had the opportunity to sit next to Jim Breyer and watch him take some tough questions from Adam Lashinsky about why Facebook doesn’t sell at the huge numbers that are being whispered in the blogs and on the street.

Jim said something important that really wasn’t picked up in the chatter about his comments. He said that all this attention on what Facebook is worth isn’t doing the company any good. I commend Mark, Jim, and Peter for their obvious intentions to keep Facebook independent and private for now. I think Facebook will make a great public company at some point, maybe in the next year.

But selling the Company would be a huge mistake. First and foremost for the users. Any buyer will screw up Facebook. Its greatness comes from the fact that the people who run the company live inside the service, they built if for themselves and it works because of that. They have their pulse on the community and they are not likely to screw it up too badly.

If you look at most web services that have been bought, they’ve lost their mojo once they were acquired. What has YouTube done lately that is so great? Skype? MySpace? Delicious? Flickr?

I really hope that in the genealogy/family industry that many companies will succeed, that winning companies will have a partnering mentality, and that customers all over the world will benefit from technology, tools, and content that can strengthen immediate and extended families.

FAMILYLINK.COM

We will soon be offering online family tree software. It will be free to our World Vital Records and FamilyLink.com members. We can’t wait to make it available. We are excited to integrate our genealogy search functionality and our social networking features into our members family trees.

Once a member submits their family tree to our site (it can be either private or public) then our forthcoming technology will be able to make recommendations (check this source or contact this genealogist) that will help them the most. And of course, we will provide a wonderful online environment for gathering all your valuable family photos and documents into a space that you can easily share with other family members.

RECRUITING

As we move from our startup phase to our growth phase, we are going to be adding some key employees. Given Utah’s 2.4% unemployment rate (the lowest in history, I think) it is not as easy as it once was to fill positions.

So just to start the ball rolling, I want to mention a few positions that we will consider filling in the coming months (not in any particular order):

1) International Content Licensing Manager
2) Controller/CFO
3) PHP Developers (including 2 lead engineers)
4) GIS Manager
5) Photo and Maps Collection Manager
6) Part time sales and support (10-15)
7) Community Outreach Manager
8) Mechanical Turk Manager (I’ll explain that one later)

I read that Facebook tries to fill every position with someone who knows how to code. So they can write their own tools whenever they need to. I think that is a brilliant idea.

I’d like to fill every position at World Vital Records with someone who loves family history, so that each of our employees knows intuitively what our customers want, and can help us create, support and market the most useful services possible.

I don’t know if it will be another 13 days before I blog again. (Actually, I need to blog about our Mechanical Turk position ASAP). But if it is, you will know that I am heads down along with my team executing on as many of the top 100 priorities as we can. We made serious progress on about 12 of the top 20 priorities in the last month, and I am confident that we will do the same in the next month.