Nick Holmes a Court started up Buzznumbers in 2009. The business tracks online conversations and analyses the influence of brands, providing analytics to clients who want to track how their reputation is faring on Twitter or the blogosphere.
Holmes a Court tells StartupSmart how the business is faring.
What’s the background to the business?
I was working in business intelligence and I always loved the internet. I worked with a company and had the idea for Buzznumbers and said ‘let’s do it’. They said ‘no’ so I went off to do it.
When it came to communications, there was media, marketing and advertising – what was being said online didn’t factor in at all. We had some conversations with fast food companies in 2007 and 2008 and they said they didn’t care what people were saying online about them.
We thought that the net was very important because until social media came along, people couldn’t assemble in the way they can now.
Who was keen to get on board?
Early adopters were happy to get on board, such as tech and insurance companies. Consumer goods moved last. We had to work hard because we knew that the whole marketing and communications game was changing.
How did you decide on the business model?
I’m strongly in favour of business-to-business models. If you can save someone money, they will give you some of that money. We could’ve tried creating content and selling advertising on that but it wouldn’t have been as successful as Buzznumbers as we can show value and then get some of that value.
How did you build up the business?
I’m a developer, so I built the prototype with some limited functionality that I could speak to customers about.
I built the system for one group of customers but realised that it was really for another type of customer. I initially thought it would be a tool for PR agencies, but I realised the search and marketing, CRM and data research areas had more valuable qualified leads. We got it into the hands of the market and saw where the value was.
I was working on it at nights and weekends and got some early customers – a grand here and there. That validated the system and people bought into it. I realised that I could now scale the company so I incorporated the company in January 2009 and went full-time in June 2009.
How does it work?
We do a lot of the heavy lifting on the web for clients with a data collection and analysis system that is patent pending. Customers ask us to report in new ways and we develop it.
Customers have a web-based platform that they log into. They can run their own reports on themselves, which allows them to filter graphs and things like that. We send email notifications and allow the data to be exported by customers to share it.
We have additional services on top of those too. The human interaction adds value.
How have you funded the business?
We bootstrapped the business to start with before our first angel round in June 2010. That meant we got a CEO on board – Andy Gent.
We had an insight into the market, but how were we going to scale it? Andy had grown sales teams elsewhere and he knows how to scale businesses and teams.
A lot of tech business founders can do it all, but sales is a very important area and for many tech founders it can be difficult. Andy coming on board has been a blessing – it’s liberating to have someone run the operations.
It’s about having the right processes in order to scale the business. We didn’t really have a business before having those processes.
What clients have you got on board?
Microsoft and Red Bull are two. We went to the big end of town as they are the ones who had the budgets.
If you’ve got a good bit of technology and have an address, they don’t care that you’re just a couple of guys. Big companies can be slower to respond, but you do end up with long-term relationships.
Having large clients can work the other way too in that they drive innovation to us. They say ‘can you do x?’ and we say ‘yes, we can.’ We now work with more than 40 organisations, as well as the Federal Government.
When we started, there were a few other companies doing the same kind of thing, which gives a lot of market validation. If you’re the only one doing something, you’re either well ahead of the game or a total idiot!
Everyone sees it as a zero sum game, but it’s not. A client may use one kind of product for CRM, one for research and so on.
What’s been the most stressful part?
Every entrepreneur has personal challenges to go though and have enthusiasm to help them battle against the odds. Saying that, it’s not been too bad for me – I’ve had more stressful jobs!
Starting up a business doesn’t cost a lot. Scaling a business costs a lot. That capital process is very difficult.
We could’ve grown organically, but it’s a question of whether you want stratospheric growth or just plod along.
Facebook became massive, but Friendster did the same thing five years previously. The timing wasn’t right for it and if you don’t scale up properly, you can get left behind.
What are your ambitions for the business?
I’d like to grow revenue in the next 12 months so that we’re a significantly profitable company. It’s about taking sales growth from 40 customers to 2,000. We should have a 30 headcount by June.
I’m really excited about it and want to work with partners and distributors. It’s very important for start-ups to see if there are large organisations that your technology could be rolled out to. I see opportunities for Buzznumbers both in Australia and overseas.
The tools are there – you’ve just got to know how to get customers’ money into your pocket. If you don’t have a plan, you won’t get there.