Interview with Michael Schutzler, CEO of Classmates.com

Classmates.com is a member supported online community, basically what that means is that we have 30 million people who have joined Classmates and become members by registering themselves with the website and we are adding about 1.5 million new registrants every month.

It is really difficult to do a search for a person on the Internet, and have meaningful results. If you were to type in a common name, such as John Smith or John Roberts into a Yahoo or Google search engine you would get a stunning list of results. Many of these results may or may not have anything to do with the particular person you are looking for. Even if you put an uncommon name, such as mine into a search engine, you still receive a stunning number of results. You also have the same problem, with results that return Michael Schutzler, that have nothing to do with me. It is very unlikely that you find the information you are looking for: contact information, history, etc. Classmates is a very interesting way of finding a name, and the right John Roberts. If you know that you went to school with John Roberts, and he was your college roommate, or maybe you graduated with John from High School.

Correct, one critical element of some point in time in the past. Now you can zero in on the right John Roberts, and in addition to that, if John Roberts has registered with Classmates you can now contact him directly. Current, accurate information, in that we have their email address and when John Roberts tells us about himself, that he graduated from this or that high school, graduated from the Wharton School of Business, served on a US Coast Guard Cutter, etc. that is all information he is providing and allows others to know more about John Roberts than they may have already known. Before they actually contact him, they are learning more about him, and establishing that connection.

It all started about 7 years ago, when a Boeing engineer, Randy Conrad, who went to high school in the Philippines was very curious about this whole Internet thing that was coming to life. All the pundits at the time were talking about how it was the beginning of the Global Village, and we were all becoming one wired web world. He happened to be a member of Prodigy and looked up a high school buddy, whom he wanted to reconnect with, and of course wasn?t successful. He sat down with his son, and said that there had to be a better way for this to work. He and his son devised a lost and found for high school alumni.

The High School section of our site has been extremely successful aspect of our business, and in our culture, High School is one of those extremely formative experiences in the mid to late teens. You are learning an awfully lot about yourself and your place in the world. That is such a heavy experience for most people that build friendships and memories of those times that last forever. As people age, they become extremely nostalgic for ?where did we come from?, ?how did we get here?, and ?I wonder if Bob is as bald as I am?, etc. You want to reconnect with those people, and to some degree it is a validation exercise of who you are. At some level it also becomes a comparative exercise of I know what I have done with my life, what have you done with yours? We find out sooner or later that we are all human beings, that we are all pretty normal, and that it is all a cool experience after all. The High School directory is addressing this nostalgic pool, and there are of course 10?s of thousands of High School reunions that are coordinated through Classmates every year. It really is a huge pain in the neck to coordinate a High School reunion the old fashioned way, by picking up the phone and sending out letters. It is so much easier to have 30-40% of you High School alumni on Classmates and to just push the button.

Not at all, you just need to be a subscriber, which costs $3 per month. It just requires someone to list themselves as the reunion coordinator.

On the contrary, online solicitation is always targeting someone to ?Please be the coordinator?. It is not a sought after job, and is in fact a lot of work. In fact we promote the use of professional planners, because it is a lot of work, and there are individuals who can help. Class officers sometimes contract with professional party planners that do this type of thing.

College is a logical extension of the High School section. College has a completely different feel to it, and it is often college roommates, and specifically people who have connected at Fraternities and Sororities.

That is a different one. High School, Colleges, Middle Schools and even Elementary Schools, which are all quite popular are all targeting nostalgia, whereas the Military section is quite different. It also incorporates the nostalgia aspect, but there is also a strong component focused on the here and now. A large Veterans community utilizes Classmates for keeping in touch and communicating with other Veterans. There is a paltry selection of sites that cater to Veterans. Those few sites, that have done it successfully in the past, have since gone out of business. There are not that many places where online communities can form naturally and easily for individuals that have served in the Military. Classmates is on the of the largest communities of online community of Veterans. We have over a million individuals that have registered in the Military section of the site.

Everything is completely overlapped. If you have served in the Marine Corp. during Dessert Storm back in 1990, you also went to college at William and Mary, and you went to a high school. All of this information is captured in your profile.

That is a totally different animal. While there is a nostalgic aspect associated with the work place, but what we are finding is that people are using this aspect for professional and career networking. Most of us are terrible at keeping our rolodexes current with prior coworker information. Even if we do a good job of keeping in contact with previous coworkers – the amount of job rotation and email rotation, especially in the last five year, has been so severe, that it is very difficult, if not impossible to stay in contact with everyone. People are finding the Work Place directories to get and stay networked, they are also using them to find jobs as well.

607,000 to date.

They are all growing quite nicely. Even High School continues to grow, and we have over 30 million listings is still growing at a very strong clip. We have seen the largest growth in the Work Place segments, primarily because we just launched it in April of this year. We expect the Work Place segment to be one of the largest drivers of growth into the future. Military is growing at the same rate, if not a little slower than High School, because we have over a million in that directory. There isn?t that large of a base of online veterans to begin with.

That is a really good question. I think that the most important thing to remember about Classmates is that it isn?t for everyone. You can?t go into Classmates unless you are willing to be contacted. There is no way to get into Classmates and play with an unlisted number. The only way to make it fair is that it requires the ability to be contacted, and contact. We don?t think it will ever reach a 100% of the Internet we could see it around 80-90% of the online population.

Well, we aren?t limited culturally. The research we have done, has found that there is a version of this for every culture in the world. The biggest constraint is the resident expertise in other cultures. Our initial forays internationally will be to go into Canada in a big way, and then into the United Kingdom. Once we have the English speaking countries down, then we will expand to other countries.

We have 1.6 million paying subscribers.

It is increasing. We have 1.5 new members registering every month, with 10% of that population paying monthly, whereas the overall rate of subscribers to total members is 5.3%. To date, all of this has been nostalgia driven and we are heading more toward the corporate networking aspect.

Well, not all about the Work Place, but also, when someone moves to a new city they are interested in finding new contacts, and establishing a base of friends.

The majority arrive through Internet advertising; banners, buttons, and text links.

We do not provide that information publicly.

We see the ex-pat community being very large, as well as a certain focus around the sports. We will most likely focus less on pre-structured searches and more about goal-oriented searches.

How do you find a CPA, how do you find a Dentist, a Broker? Some people go to the Yellow Pages, but most people ask someone they know! Because of the vast amount of data we have on people, we will be able to offer our members the ability to network with people they know about people they need to know.

It is likely. Whenever there are demand points, there is the ability to up-charge. Think of the cable industry, which offers basic cable, and up-charges for additional services/channels. As we come up with premium services, they may be either subscription or per use.

The most critical lesson of all was that if the customer wasn?t willing to pay for it, then it wasn?t worth doing. The notion that we were going to be able to survive on advertising alone didn?t make any sense. A site like Classmates is almost the exact business model as a magazine. We have editorial content, which in this case user driven, and we need revenue from both subscription and advertising in order to be a viable company. If you are going to be a content site, then you are going to need multiple forms of revenue.