Interview with Brian Magierski, CEO of Kalivo

Absolutely. Kalivo is in the business of helping companies engage with their customers using the latest and greatest of Web 2.0 technologies. We track content that is created in blogs and online communities relevant to our customers.

In addition, their customers and potential customers are aggregating on the web and are discussing the company?s services and products. These communities are directly influencing their relationship with our customer?s brand.

Companies need to take a part in this user-generated content web and engage from a marketing perspective in ways that are vastly different from the ways that they have in the past, which have typically been one-way communications through press releases, advertisements and other marketing methods.

Kalivo created a Hub, which is a site for them to spread their message as well as aggregate the content that is currently online. It allows users to interact with each other in conversations that are blog-like, or forum-like as well as the company to cast out their message in a blog-like format.

In addition, the Kalivo Hub provides a business oriented search capability. Companies can identify what is being discussed and where that conversation is happening on the web. It allows them to look at those conversations and decide whether or not they want to participate in them, or share those conversations on their own hub with an import function. That’s kind of an engagement vehicle that we’re giving them with the Hub.

We’ve seen that there is interest across all company sizes. I think if there’s any kind of segmentation of interest, it is for those companies that have an active customer base on the web. Their customers and their prospects are using the web, and that typically means that it’s more the technology oriented industries and/or consumer electronics industries right now. Although, we’re seeing companies such as Wells Fargo and others blogging, they are outside of the technology industry, and I think their customers are reasonably engaged as well.

Smaller companies have a more limited online presence, but by putting out a hub and engaging on the web and creating an aggregation point they’re actually increasing their presence on the web from the perspective of the search engines and blog searches. So it gives them an instant way of being found on the web, generating relevance and demonstrating their expertise.

For the larger companies, we’re finding that there’s definitely an interest, but they take more segmented approaches, saying, “We won’t necessarily need to create a hub for our entire company and our entire brand, but we maybe want to look at a particular market segment, or a product line, or decision maker in our purchase process, and then we’ll focus on that.” The interesting thing for the larger companies is that there’s a lot actually being said about brands such as Dell or Apple, or any other of the larger tech companies that you think about. It’s taking time to work through the larger companies for us, but we do have a handful of sales partners. We’re finding that there is a need for this hub approach for them as well as for small companies. It’s just for different reasons.

That’s difficult to say at this early stage. That’s why we’re exploring both. The appeal of the small companies for us right now is that there is a lot quicker decision process and a lot more engagement in terms of feature feedback and where to take the product. From the prospect of the larger companies, it basically gives our company a lot more credibility when we have a large brand name using us. They tend to attract a lot more users, which will drive our price points up. But the sales cycles tend to be longer because of the risk-averse nature of an established, branded company. They’re looking at this user-generated content world and seeing even the companies like Southwest, like Dell, that have gone in and said, “If we start a corporate blog…” It’s sort of like dipping their toe in the water and taking a very careful approach.

As a startup, you can end up with some very, very important sales angles that may or may not ever come to fruition, and yet the financial way through is we get a lot quicker turnaround and we’re driving our features faster a lot faster. So the strategy that we’ve been thinking is, we’ve been pursuing the smaller companies and trying to get as many of those into our beta customer program right now because they’ve been well-paying. They’re quicker to adopt and we’re getting a lot more product direction out of this.

We’re investing heavily on the small and medium business to really drive business forward and keeping our finger on the pulse of the big guys and hoping that we can close a lot of those, but not really forcing ourselves to depend on closing one of those to survive this company.

That’s what we’re trying to do. Now they can focus immediately on the customer engagement side. That’s the benefit of Kalivo. We walk in, and we can turn this on as a service overnight, literally, and have them up and running with a completely themed and branded site. From that point forward (which is instantaneously), they’re focused on “How do we engage our customers?” Immediately they have content into their hub on the web, that’s linked to the web structure and linked to the blogosphere and found on the web. So literally overnight they establish themselves a presence, they’re finable on the web, and customers can come to them and they can start engaging with them in conversations immediately.

That gets right into the business value from the second the service gets turned on, and there’s zero technology footprint from their perspective to deal with.

There is a lot of content out there. One of the things we’re trying to do is help the company parse that content in specific ways, so they can say, “Hey, I’m curious. We just did a new product introduction for one of our products. I want to see what is being said about this new product introduction over the past week across the entire web. I want to focus on blogs and social communities. Show me the newer conversations that are happening. Show me the timeline of conversations. And for each one, give me the tone of that perception. Show me how many positives are the conversations are saying about this product. How many are negative? How many are neutral? What’s the growth rate on those? Then show me the areas of the web where most of the conversations are coming from. Are there any aggregation points?”

If there are a lot of positive ones happening at a certain aggregation point, we’ll take it as an opportunity for the company to post to comments, or even advertise on that site. If there are a lot of negative ones coming from a certain aggregation point, that’s something that needs to be addressed. The company certainly wants to post a comment, maybe through their own hub, and maybe there as well linking back so they can at least address the issue as well as try to martial some of the customer support they already have to try to refute the negative comments or maybe have a different perspective on those negative comments that might have come from their customers. The hub can martial their customers against negative activity where appropriate and at least try to neutralize that or at least try to provide another perspective from sampling of the customer as opposed to the company. They can really bring a lot of credibility just by marshaling their customers.

There’s so much happening that that companies aren?t even aware of, and we’re just trying to provide a quick insight into that so they can implement different strategies that are effective for them.

It’s too early in the process for that right now. We’re trying to track the lead flow and we’re trying to provide integrations into the CRM systems.

We believe that our customers will have a better relationship with their current and potential customers as well as will increase lead generation and customer loyalty. That pertains to customers coming and repurchasing your products, because you’re much more engaged with them if it comes from customers participating in the hub and seeing some of the feature feedback that they’re giving drive into your products or services. As customers use your hub and start referring other customers your way, referrals, we say reach your referrals, we think that will be a line driver.

And there are going to be a lot of soft returns that come out of overall positive perceptions of being out there and being engaged and accessible. We don’t have specific metrics yet, but we are monitoring each of our customer sites for that and working with our customers to capture their specific metrics.

It actually dates back to 1996, 1997. I was in business school at the time studying service management under Leonard Schlesinger, who is now running Limited Brands. He had written a book with James Heskett and Earl Sasser called The Service Profit Chain. It dealt with the whole issue of customer loyalty and measuring the value of loyal customers. The customer thing really fascinated me in terms of the value of a loyal customer and measuring that. I started doing research on one-to-one marketing and looking at the latest software companies. The things that I ended up concluding was that, one, I was in a lot of debt so starting a software company wasn’t the greatest thing to do at that time. The second was, I didn’t see the capabilities or the tools or the technologies available at the time to create that one on one relationship between a company and it’s customer to drive the loyalty and track those metrics. What we saw was Epiphany and Rubric and other marketing automation companies that got started that ended up getting into some heavy data mining and campaign management that were more technical. They got swallowed up by some of the bigger vendors or just didn’t make it across the chasm.

What inspired me now is I’ve been following this all the way through waiting for an opportunity where I think the timing is right where all the stars are aligning behind this. What I think has changed is not necessarily a technological revolution, it’s the fact that individuals, consumers, customers are now on the web. They are not passive. They are active. They are creating content, they are engaged and they are aggregating on their own and forming communities and discussing products and companies. That means you have access to the vast majority of consumers and customers.

Engaging with customers is going to be a necessity and not a choice for companies. Their customers are out there and they are talking about companies. I think that was the catalyst for me to say now is the time for companies to engage with their customers and we can drive this economy by helping them engage because the customers are actually out there doing it now. It’s been just through my own personal tinkering around with blogging and feed aggregators and comment things on my own on the web over the past couple of years that at the beginning of this year I kind of freed up and realized that this is the time for companies to start doing this and the catalyst is there.

No, it’s not. It’s – I don’t know. I wish I had a good answer for that. The answer is I can’t help myself. I’ve been fascinated with technology and software and fascinated with entrepreneurship. I’m affiliated with the advisory council for Entrepreneurship at Cornell. I guess at the end of the day I really want to be in control of my own destiny from a professional and career standpoint. My vehicle is through technology related companies. I guess that’s really at the core of why I do this and will continue to do it over time.

It’s tremendously rewarding and difficult. You really have to have a sense of purpose about it if you going to buy into it because you are generally out on your own. That’s part of the appeal of it but it’s also part of what makes it difficult to do as well as frightening to do in some respects. Be prepared for that and create a great support structure behind you whether that’s your spouse or your network of friends, because you’re going to need it to get through the tough early days. If you’re cut out for it and cut out for controlling your own destiny it’s highly recommended. The other piece is to know to a great level of detail what you are getting into. You need to be an expert in your field when you go into it supporting your business. You’re going to have to be the expert. Because of that subject detail and the lack of resources you’ll have, your expertise and knowledge of the space and belief in it are really what is going to propel you across the chasm and growing into a successful business. So I would encourage having deep expertise and knowledge of the business you are getting into and a deep passion for it as well as a passion for being in control of your own destiny. It’s very rewarding, without a doubt but it can be lonely at times.

Kalivo has secured some seed capital, in the hundreds of thousands of dollars from an angel investor and myself. Prior to this it was a bootstrap effort with me and one other co-founder where we just had not been working full time jobs. We’ve been working on this full time with no salary and very little expenses. We had maybe a couple of thousand dollars of expenses at best outside of the fact that we are taking no salary. About nine months of bootstrap and now we are getting some seed money. We are targeting to have an installed base of ten customers plus or minus a couple. Once we do get that stabilized and some of our sales process stabilized and business policy stabilized we will be seeking venture funding to grow the company.

Yes we are. We’re running on Kalivo.com as an implementation of our product. It’s our customer hub. I also blog on WordPress on my own site but I hold those feeds in to something that’s tagged as blog, basically a demonstration of how the Kalivo system can pull a feed in from externally and represent the posts with all proper link backs and sighting that’s necessary. I do blog externally, but I also have that blog posted on Kalivo. Anyone can come up and register with Kalivo and interact with us. We are imbedded in the link structure of the web. We use our own listener to find conversations and aggregations of prospects on the web. So it’s working out very well. We’re delivering some feature ideas just for our own use of the system. We take it our customers and they tell us, “Yeah, that’s a great idea and we would love to be messengers” and it’s largely because we are just using the software ourselves.