The real trends in online business

The online customer journey has taken a few twists and turns, but David Trewern has been mapping the landscape. He sold his business DTDesign but stayed on to steer its course in the right (and profitable) direction, and shares his experience with AMANDA

By Amanda Gome

This interview first appeared 8 October 2008

The online customer journey has taken a few twists and turns, but David Trewern has been mapping the landscape. He sold his business DTDesign but stayed on to steer its course in the right (and profitable) direction.

David Trewern founded and then sold web design company DTDigital. Unusually for an entrepreneur, he has happily stayed on as CEO.

He talks to Amanda Gome about the sales process, the latest in online practices, how he took the business from $1 million revenue to $8 million and his strategy going forward.

Audio 

To listen to the interview with David Trewern, click here (interview length 18 minutes.)
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Amanda Gome: What made you to decide to sell the business?

David Trewern: It’s been a staggered process and it’s a business that I’m still very much involved with and will be for a long time to come. About four years ago I was introduced to STW.

…associated with John Singleton?

It used to be, it’s a public company, it’s the largest diversified communications group in the country; they own about 75 companies. I was introduced to them four years ago and they took a 30% stake in my business, then 40% then became 100% 12 months ago or so.

I set up my business on my own and I wanted some grey hair and some experience to help me grow the business. It was really set up as a partnership where they would give the knowledge and experience and also access to clients to help me grow the business.

How many employees did you have back four years ago when they took their 30% stake?

Probably 12-13 employees.

So about $1 million in revenue?

Yeah.

And you sold that 30% stake for say half a million?

Can’t talk too much about figures.

You had been running your own show. What was it like having a large company on your board? I presume they took a board position and got involved. What was that like?

They did. Look, it’s actually been great. I mean, I’ve had a really good experience. The guys at STW play a very straight bat, they’re very down the line. We have had a very good trusting relationship from day one. And it’s benefited both sides.

What are the key benefits they brought?

I really enjoyed having some discipline. They let people run their companies on their own. So we’ve rarely had a board meeting. I pretty much do things the way I want to do them, but if I need help I go to them, so that’s really how it works.

You don’t meet with them once a month?

No, no; I send through figures once a month and I probably catch up with them face to face a couple of times a year to talk about the business specifically and that’s really me telling them what I’m doing. So I think when businesses are performing well as ours have these sorts of organisations leave people alone to do what they do best.

So four years ago you had one-and-a-bit million in revenue. What’s your business turning over now?

This year we’ll turn over just under $8 million.

And what have been the key ways that you’ve grown the business in those four years?

It’s really about going through a number of different stages; and this is the thing – I think initially I was concerned about taking on another partner and I was concerned about moving and merging this time last year as well.

We’ve gone through a number of phases and stages that have been necessary, which is a little bit like going from primary school to senior school – you can look back with nostalgia at the way things used to be but ultimately we’ve moved forward and the business has grown, and it’s been good for the clients and the staff and for everybody.

What’s been the major parts of the strategy that have increased your revenue from $1 million to $8 million?

Access to knowledge, people and support. There’s a range of people within STW that I can call upon and talk to, from finance people to people that can help with new business, to lead generation, to the broader Ogilvy network, which we’re a part of.

There’s been points along the way where our growth has really been supercharged by the things we’ve done. In June last year we merged with Ogilvy Interactive in Melbourne, and we moved in with an advertising agency and that gave us a very big shot in the arm in terms of growth.

What have been a few of the things that you would have changed looking back?

Not a whole lot I don’t think. I mean it’s been a very good experience for me and I think I’ve been very open to change. I’m somebody that’s pretty optimistic and I’m always looking to the future. So the business has changed and evolved and grown very rapidly but at a speed that’s been the right speed for me.

So back to the sales price; at the end of four years when you sold, you probably got more than $2.5 million?

A little bit more but I can’t talk too much about all of that in terms of specifics because of my agreements and so forth, which are all confidential. As an $8 million turnover business now it’s a strong healthy business.

Have you always been profitable?

Always, from day one. We started out in 1996 before the whole dot-com boom even began, and we’ve never not made a profit in a quarter in 12 years.

So what’s your projections going forward? You’re getting up to being a medium sized company and one of the more established players in the field. Where do you see the company going?

We’re now part of a global network. We’re approaching 60 people in our office in Melbourne. We’ve averaged about 55% revenue growth over the last two years so we’re growing incredibly rapidly, especially in the current economic climate.

Why is that?

Well I think the area that we’re in is… well, we’re in demand. I mean I think we provide a good service, we’ve got great people, we do great work. We’re in demand. People are moving marketing spend into the area that we are responsible for, and we’ve evolved and grown our business to suit needs. We’ve also added new services and we’re a very different business today.

Strategy wise, what are you going to add? What specific functions do people now want that they didn’t want a few years ago?

I think at the moment our strategy is really around providing a full service offer. There’s a lot independent technical web companies, which is what DTDigital used to be. There’s also a lot of agency connected digital marketing companies, which are usually relatively small because they don’t have that technical expertise in-house.

So I would like to think that we are probably now one of the only companies in Australia where we’ve actually brought those two things together and made it work from a cultural point of view.

We’ve got specialists in a range of areas from search engine optimisation, we host about 80 websites, we look at digital media and we’ve built online tools, e-commerce. I think this has been led by client demand. They really want to go to one company that can look after everything for them that is connected with an agency, that can talk at CEO level about their business strategies.

What are the new questions that people are asking? Are they asking more for open source? What are the trends you’re seeing in the digital market place?

It’s all about our customers reaching their customers. So I think a lot of the conversations are around where their customers are going to be next and where they are now. There is a lot of talk about social media, about building networks and becoming more a part of people’s everyday lives in terms of building brands.

There’s a lot of talk about the changing nature of power shifting from governments to corporations and now back to the consumer and what that means for businesses. And how can we respond to that by building tools and changing the way we market and so forth. So it’s a whole lot of different things, it’s not any one thing.

Just on that point, how are the companies looking to communicate more closely with the consumer? How web 2.0 are they?

I think they’re becoming very aware of the issues, but in some cases the consumer is always going to be a step ahead. There are younger consumers who are out there doing their thing in the social web, and marketers are sort of chasing them down to a certain extent.

As much as we want to be leading, and everyone wants to be leading, the online world and the way that people behave online is evolving incredibly rapidly. It’s not any one thing. I think what we’re doing at the moment with clients is really working on strategies that look at all of these different areas. The whole ecosystem that exists online is now huge.

Are they looking at specific things like forums and blogs?

Definitely. It depends upon the client and their strategy. You’ve got forums and blogs, you’ve got building properties that actually allow people to do things rather than just talking about things, which is what marketing has traditionally been about.

And then you’ve also go mobile. I’m very, very bullish on mobile. I can see similarities with what’s happening with mobile at the moment and the growth of the internet when I first started my business 12 years ago.

So I think that’s one huge area and I think the catalyst for that has really been the iPhone in the same way that Netscape was the catalyst for the browser wars that happened 12 years ago. So I think that’s another area that we’re talking to a lot of clients at the moment about. We’re launching our first iPhone application next week for a client. So that’s one area of focus at the moment, definitely.

What are your customers looking for? Do they want to advertise?

I think technology goes through a bit of an S-curve, and we’ve seen the early adopters with their iPhones downloading 100 million applications in the first 60 days and they are using the iPhones to do all sorts of things. Google Android is coming along next.

So it’s actually about not trying to advertise on a phone, it’s actually about trying to provide convenience and services to customers that allow them to get more out of the technology and as a result being more a part of their everyday life.

So having your brand in your customer’s pocket is a very valuable thing to a marketer. And that’s the opportunity for mobile – it’s not to find new ways to go advertise, it’s about developing the content first, not the advertising.

What sort of content are they looking at developing?

Well I think it obviously comes down to the client, but there’s an application for everybody depending upon the category you’re in. But I can see areas like finance and banking and purchasing large goods in terms of research and all those sorts of things.

I look at myself a lot, I’m an early adopter… I’ve used my instinct a lot in developing my business. I now don’t use my computer at home on the weekend. I probably use my iPhone to look things up on the web and do things 70% of the time, and I go to my computer infrequently. When you’re out and about and you can access the GPS and all the other bits and pieces, there’s so much potential of things that you can do with a mobile device to enhance a client’s service offering and their product offering.

I just came back from Vietnam and it was amazing to see how many people had mobiles. Even kids of poor families had mobiles and their computers were very old, not many people had them. You could see this was a country that could quite literally pick up mobile…

There are more mobiles in Australia than there are people, and Google talks about a billion people online and the next billion people will come online via mobile devices, that will end up cheaper than computers and have all the functionality of a computer.

All you need to do is go and look at the most popular iPhone applications and you can see huge potential there for companies and brands to be taking ownership over some of these applications and offering services that relate to whatever it is that they do that exist a mobile device.

So what’s your favourite thing to do on a mobile?

I do lots of water sports and things. There’s lots of weather applications that I use and finance applications. I think one of the most popular iPhone applications at the moment for Australians is actually a directory for train timetables that shows you how far away your nearest train station is and map it on Google to show you how to walk there and actually tell you how many minutes until the next train departs on the line you want to go on.

That’s just one example; if that’s in your pocket and you rely upon that every time you go somewhere, the old ways on the computer and the internet all of a sudden becomes redundant, because you’ve got this thing in your pocket. Three presses with your finger and you know that the next train departs in a minute and it’s 500 metres away to the nearest station.

I mean that’s one example; there’s TV guides, obviously anything to do with finance and trading shares is migrating online. The opportunity presented by the touch screen and the GPS provides for a much more intuitive experience than can be offered on a computer with a keyboard and a mouse. My three-year old son can navigate through my iPhone and flick through photos and zoom in and out, but he can’t yet use a computer and a keyboard and mouse. To him it’s a closer metaphor to what happens in a physical world and it’s a very easy thing to do. It’s a no-brainer.

What are the trends online in design? How is that changing?

The way that we’ve approached our work has always been about focusing on the customer. The customer of our customer, the end user and their experience and putting them first, and I think that that trend is only accelerating. Even though people have broadband connections, websites are becoming quite streamlined and that web 2.0 look is all about efficiency to help people to get things done. We talk a lot about return on effort for the customer. Every minute they put into a web experience, what can we give them back?

I think that just more recognition of the fact that customers are empowered, and brands and companies will win, that actually further help their customers be even more empowered rather than putting out barriers and sending them off on an online journey that’s all about the company. So that’s really the big trend.

Also connecting things together as well; you know, how do we connect Facebook information with online shopping information with whatever it might be – making connections that are then relevant for the customer.

A lot of customers now search for something and then find it and then come to the site through the back door. How is that changing design?

The customer journey for all products and services now begins at Google and looking at what happens on Google is the best indicator of consumer behaviour and so forth. Designing sites that are Google-friendly, that allow people to find the content that they are looking at the search engine, is really important and some of that search technology is then coming through to websites, introducing Ajax technology to make searching within a site much more efficient. There are a whole lot of things going on there, but definitely Google is a very important machine in the whole online experience.

This is an edited transcript

 

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