Beckon founder - Jochen Frey - about its business model

Beckon founder - Jochen Frey - about its business model INTRODUCTIONMartin: Hi, this time we are in San Mateo in the Beckon office with Jochen. Jochen, who are you and what do you do?Jochen: My name is Jochen Frey, I am the co-founder and CTO of Beckon. And what we do is that we unite all data for marketers in one place so they can finally figure out what works and what doesn’t work, mostly by themselves.Martin: Tell us about your background, Jochen.Jochen: I’m from Germany obviously. I studied software engineering and medicine and then after having started my first company during University even, I decided that I wanted to come to the United states and work here. I was looking for adventure, essentially what it boiled down to and I’d say I’ve found plenty of that.Matin: Okay, great.BUSINESS MODELMartin: Let’s talk about the business model of Beckon, can you tell us briefly how it works?Jochen: Beckon is the software as a service, so we deliver the software mostly for web interface integrations to our customers. Our customers ar e marketers, cross-channel marketers, CMOs, very senior marketers and what we delivered for them is an integrated, normalized, standardized view of all the data which they can then use to make better decisions on a day-to-day basis as opposed to after the fact, as well as use it for their modeling of how they’d like to change if they spent money differently for example.Martin: You are using a very interesting mode of how you aggregate those data, can you explain to us it works?Jochen: Sure, obviously everybody asks us, are you using those APIs? Which kind of APIs do you use? And we’re like; it’s really not the way to go. In order to make marketers happy you have to really be successful there, you have to load data from all sources out there whether they are online, offline digital, non digital, whatever it is you have to be able to get that. And the shortest version of it is, we also call ourselves sometimes the trip.it for marketers which is you can get data via email into Be ckon which enables so many systems that you otherwise couldn’t get the data from an automated basis. With that said, we’re using whatever it takes whether it’s email, or APIs, or SFTP server or whatever it takes, it really is where it’s at but mostly email.Martin: With what type of metrics are you helping CMOs to perform better in their marketing?Jochen: Like leaders of every other business functions, CMOs in the end should be accountable and would like to be accountable for return on investment. And a lot of them are really desperate to have good reports to show to their board or to their CFO because every other business functions has those. Now, it is really hard to measure that in a meaningful way and get all the data together in a meaningful way. So, in order to get there and in order to manage it well, you really want to take it one level down from there. And things that matters to marketers are the impressions that you have, how many people in the B2C world; how many p eople that are aware of me; the engagement; how many people are engaging with my brand, replying to twitter, forwarding things to their friends, those type of things; and then the revenue, obviously; and then typically the retaining people in the mix. So, the metrics that you use to do this and the interesting pieces are marketing spend, how much do they spend and on what obviously. And then the marketing activity metrics, ‘I have sent out emails, I have put them in bill boards, I’ve put them 10 seconds on television, television spots What are the outcomes? How many people have watched it the television spot; how many people retweeted my tweet, those types of things; and lastly the business outcomes, when available. More often they are not, but when they are available, this is how many peopleâ€"what people bought . So those are high level metrics, there is a set of metrics coming up that has been next to impossible to measure but now with Beckon you can which is things like earn ed or unpaid. So typically you pay for a television commercial, that is paid but when the television commercial gets aired you can as well put on your website supporting information or something like that, that’s owned. I own my website, I can put it there and people will see it if they come. And then there is earned which is the people, consumers, whoever saw it and liked it and then retweeted it or like it on facebook or talked to their friends about and then you can measure those types of things. Obviously, you want campaigns or you are going to do more things where you get the free kind of marketing. The earned kind we are being able to measure that and resonates incredibly well with marketers who need to be more efficient doing what they are doing.CORPORATE STRATEGYMartin: In terms of corporate strategy, there are so many predictive analytic start-ups over here in the Valley and what makes you different and why is it that you are trying to solve one of the problems?Jochen: We ll, first of all we are not a predictive analytic start-up, we are all about bringing data together so it becomes actionable for marketers. Many people are trying to go out there and say ‘Make things tell me what to do’ predictive analytics or ‘tell me why it’s going to happen’. Well that’s nice when you can do it, but until we get there it’s really nice as well to see the thing I just did, did it work or did it not work because if it worked I’ll do more of it and if it didn’t work, less of it, so. We believe that the way marketing works is not like one model where you come up with a number saying I should spend 30% on television and 70% on digital and then you manage through that number, that seems bizarre to me. An organization should be able to make a million little decisions everyday where people make just better decisions and you acquire capability in house and for that you need a place where people can look at the data and agree on the data and act on it and that’s where we think the market is right now. Predictive will happen but first you need the data in a form and in a place where you can act on it. CFOs, Financial people would not stand for what marketers do right now. You can’t have your expense report and you just put your receipts into a mailbox and then at the end of the year you go and you want a report and go through the mailbox and sort through the whole thing. No firms function would stand for it, but this is how marketing works today. You do all of those things, there’s data coming out, it sits in places where it doesn’t come together and then you try to make sense of it. If you make sense of it and you gathered and put it in a place, while CFOs press a button and they’ll know how much money they’ve made; they know how much more they need to spend on salary. Marketing typically not so much and it’s not because marketers are not willing or not good doing it, it’s just the data has exploded around them, it us ed to be 4 or 5 channels; radio, television, and other forms. Now it’s 25, 30 channels, you can’t do that in your heads anymore.MARKET DEVELOPMENTMartin: Let’s talk about Market development and especially starting with the ecosystem, can you briefly explain how the eco system for marketer works?Jochen: The eco system I think in my mind there are two eco systems and that is how marketers execute it right now: it’s either in-house or with agencies or with technology; and then there is within technology. And within technology, the landscape that is important to us is that there is more and more channels that marketer can execute whether with Twitter or Facebook or Pinterest that came in over the last year or so, just more and more of those. And there are fantastic systems for just mostly any of the channels, how do you engage with twitter, or email systems very mature market but highly sophisticated. Those are execution systems that are really really good, doing analytics in c hannel, they can tell you if the email works better when you send it at 7 o’clock in the morning or at 10 o’clock in the morning; if with this subject line or another subject line; they are really really good at AB testing marketers or whatever you want. What we do is that we take the outputs from all those systems and say, how many emails did you send; what types of people did you send them to; and what are the open rate, click rates did you get. So for email if you look at it, there still only 5 or 6 metrics that matter:how many did you sent,how many bounced,how many got opened,how many get clicked,how many got forwarded,how many Unsubscribed, that’s 6.And it doesn’t matter which email system it is, it’s always the same thing, so we’ve done this, we’ve mapped what we called the marketing Genome which is a way to tell marketers that taxonomy matters. So we map the channels, we map the metrics and the eco system for us is that all the systems that marketers use to do s omething come up with data that they then use to look at if it was successful or how successful it was or not and that’s the data that we put together. So, we’re in many ways, an analytic layer on top of execution systems.ADVICE TO ENTREPRENEURS FROM JOCHEN FREY In San Mateo we talked with German entrepreneur Jochen about the business model and the history of Beckon. Furthermore, Jochen shares his learnings and advice for young entrepreneurs. The transcript of the interview is provided below.INTRODUCTIONMartin: Hi, this time we are in San Mateo in the Beckon office with Jochen. Jochen, who are you and what do you do?Jochen: My name is Jochen Frey, I am the co-founder and CTO of Beckon. And what we do is that we unite all data for marketers in one place so they can finally figure out what works and what doesn’t work, mostly by themselves.Martin: Tell us about your background, Jochen.Jochen: I’m from Germany obviously. I studied software engineering and medicine and then after having started my first company during University even, I decided that I wanted to come to the United states and work here. I was looking for adventure, essentially what it boiled down to and I’d say I’ve found plenty of that.Matin: Okay, great.BUSINESS MODELMart in: Let’s talk about the business model of Beckon, can you tell us briefly how it works?Jochen: Beckon is the software as a service, so we deliver the software mostly for web interface integrations to our customers. Our customers are marketers, cross-channel marketers, CMOs, very senior marketers and what we delivered for them is an integrated, normalized, standardized view of all the data which they can then use to make better decisions on a day-to-day basis as opposed to after the fact, as well as use it for their modeling of how they’d like to change if they spent money differently for example.Martin: You are using a very interesting mode of how you aggregate those data, can you explain to us it works?Jochen: Sure, obviously everybody asks us, are you using those APIs? Which kind of APIs do you use? And we’re like; it’s really not the way to go. In order to make marketers happy you have to really be successful there, you have to load data from all sources out there whethe r they are online, offline digital, non digital, whatever it is you have to be able to get that. And the shortest version of it is, we also call ourselves sometimes the trip.it for marketers which is you can get data via email into Beckon which enables so many systems that you otherwise couldn’t get the data from an automated basis. With that said, we’re using whatever it takes whether it’s email, or APIs, or SFTP server or whatever it takes, it really is where it’s at but mostly email.Martin: With what type of metrics are you helping CMOs to perform better in their marketing?Jochen: Like leaders of every other business functions, CMOs in the end should be accountable and would like to be accountable for return on investment. And a lot of them are really desperate to have good reports to show to their board or to their CFO because every other business functions has those. Now, it is really hard to measure that in a meaningful way and get all the data together in a meaningful way. So, in order to get there and in order to manage it well, you really want to take it one level down from there. And things that matters to marketers are the impressions that you have, how many people in the B2C world; how many people that are aware of me; the engagement; how many people are engaging with my brand, replying to twitter, forwarding things to their friends, those type of things; and then the revenue, obviously; and then typically the retaining people in the mix. So, the metrics that you use to do this and the interesting pieces are marketing spend, how much do they spend and on what obviously. And then the marketing activity metrics, ‘I have sent out emails, I have put them in bill boards, I’ve put them 10 seconds on television, television spots What are the outcomes? How many people have watched it the television spot; how many people retweeted my tweet, those types of things; and lastly the business outcomes, when available. More often they are not, but when they are available, this is how many peopleâ€"what people bought . So those are high level metrics, there is a set of metrics coming up that has been next to impossible to measure but now with Beckon you can which is things like earned or unpaid. So typically you pay for a television commercial, that is paid but when the television commercial gets aired you can as well put on your website supporting information or something like that, that’s owned. I own my website, I can put it there and people will see it if they come. And then there is earned which is the people, consumers, whoever saw it and liked it and then retweeted it or like it on facebook or talked to their friends about and then you can measure those types of things. Obviously, you want campaigns or you are going to do more things where you get the free kind of marketing. The earned kind we are being able to measure that and resonates incredibly well with marketers who need to be more efficient doing what they are doin g.CORPORATE STRATEGYMartin: In terms of corporate strategy, there are so many predictive analytic start-ups over here in the Valley and what makes you different and why is it that you are trying to solve one of the problems?Jochen: Well, first of all we are not a predictive analytic start-up, we are all about bringing data together so it becomes actionable for marketers. Many people are trying to go out there and say ‘Make things tell me what to do’ predictive analytics or ‘tell me why it’s going to happen’. Well that’s nice when you can do it, but until we get there it’s really nice as well to see the thing I just did, did it work or did it not work because if it worked I’ll do more of it and if it didn’t work, less of it, so. We believe that the way marketing works is not like one model where you come up with a number saying I should spend 30% on television and 70% on digital and then you manage through that number, that seems bizarre to me. An organization shoul d be able to make a million little decisions everyday where people make just better decisions and you acquire capability in house and for that you need a place where people can look at the data and agree on the data and act on it and that’s where we think the market is right now. Predictive will happen but first you need the data in a form and in a place where you can act on it. CFOs, Financial people would not stand for what marketers do right now. You can’t have your expense report and you just put your receipts into a mailbox and then at the end of the year you go and you want a report and go through the mailbox and sort through the whole thing. No firms function would stand for it, but this is how marketing works today. You do all of those things, there’s data coming out, it sits in places where it doesn’t come together and then you try to make sense of it. If you make sense of it and you gathered and put it in a place, while CFOs press a button and they’ll know how mu ch money they’ve made; they know how much more they need to spend on salary. Marketing typically not so much and it’s not because marketers are not willing or not good doing it, it’s just the data has exploded around them, it used to be 4 or 5 channels; radio, television, and other forms. Now it’s 25, 30 channels, you can’t do that in your heads anymore.MARKET DEVELOPMENTMartin: Let’s talk about Market development and especially starting with the ecosystem, can you briefly explain how the eco system for marketer works?Jochen: The eco system I think in my mind there are two eco systems and that is how marketers execute it right now: it’s either in-house or with agencies or with technology; and then there is within technology. And within technology, the landscape that is important to us is that there is more and more channels that marketer can execute whether with Twitter or Facebook or Pinterest that came in over the last year or so, just more and more of those. And the re are fantastic systems for just mostly any of the channels, how do you engage with twitter, or email systems very mature market but highly sophisticated. Those are execution systems that are really really good, doing analytics in channel, they can tell you if the email works better when you send it at 7 o’clock in the morning or at 10 o’clock in the morning; if with this subject line or another subject line; they are really really good at AB testing marketers or whatever you want. What we do is that we take the outputs from all those systems and say, how many emails did you send; what types of people did you send them to; and what are the open rate, click rates did you get. So for email if you look at it, there still only 5 or 6 metrics that matter:how many did you sent,how many bounced,how many got opened,how many get clicked,how many got forwarded,how many Unsubscribed, that’s 6.And it doesn’t matter which email system it is, it’s always the same thing, so we’ve don e this, we’ve mapped what we called the marketing Genome which is a way to tell marketers that taxonomy matters. So we map the channels, we map the metrics and the eco system for us is that all the systems that marketers use to do something come up with data that they then use to look at if it was successful or how successful it was or not and that’s the data that we put together. So, we’re in many ways, an analytic layer on top of execution systems.ADVICE TO ENTREPRENEURS FROM JOCHEN FREYMartin: Assuming one of your German friends comes to you and says, ‘Jochen I want to start my own company’, what would you advice him? What should he do and what shouldn’t he do?Jochen: I am laughing because there has been so much glamour around starting your own company and everybody is supposed to do it, at least around here it’s that way that people come up I’ve talked to people and I’ve met a lot of people who are in their 25 and think they are late to start their own company: ‘it’s too late, you should do it right in the university’ or whatever it is. And I laughing because there is such a glamour around it and the reality is simply not as rosy. Everybody knows that it’s incredibly hard work but I am not sure if everybody knows that failure is more likely than success, even moderate success. Some of the VCs told me that a third of the companies do well, a third break-even, and a third just burns out. So don’t assume that it’s glamorous, don’t assume that you’re going to make a lot of money. Chances are if you have a good job at Google or some such place, you might make more money in 10 years of your life. Be prepared to put 5 to 10 years into it, probably more like 10 now a days and be prepared to work incredibly hard. So, I think that people are built for that and who actually don’t have much of a choice in doing something different and really be happy, then you absolutely have to do this. But think hard about it, don’t do it for th e glamour.The other thing is find a good partner to do it with, if you can help it don’t do it by yourself, find somebody that you see eye to eye with, it’s so important. There are going to be bad days, there are going to be really really bad days and you want someone who you can rely on good judgment and for strength and for just the support in general. It’s a total roller coaster, the same day you can just be so excited and then so disappointed. The highs and lows of emotions are amazing.In terms of how to actually how to do it, many people have said that and I think you should pick something you care about, you have to be able to care about it even when you are not making a lot of money and maybe you never will and you still you want to be able to feel like it’s been worth the time, the years, things you haven’t done. You want to be able to look back and say that it was absolutely worth the shot, it was worth trying. I think those are probably the major ones.Martin: Ok ay. Jochen, thank you very much for your time. And as Jochen said, it is very important that you find the right co-founder, maybe you look around your people, your friend or maybe your co-students and see who would be willing and able to start a company with you. Thank you very much.