First, there was the Word, i.e. the online message board. And then websites proliferated, selling all sorts of stuff. The message board, however, has not gone away. Instead, it’s being increasingly used by all sorts of websites to turn passive visitors into active contributors.
Instrumental in the deployment of online message boards is Seattle’s Infopop, creator of the Ultimate Bulletin Board (UBB), some of whose features are now almost ubiquitous on the Internet (like the smiley/sad faces used to categorize messages). Although UBB has a customer base of more than 200,000, Infopop is not content to rest on its laurels. In July, the company introduced its next-gen software, OpenTopic. And it’s now seeking $10 million in VC money to fund expansion. To learn more, we took Infopop’s co-founder and Executive VP Rosemary O’Neill out to lunch.–SJ
Seattle24x7: Rosemary, there are lots of companies that make and sell discussion-board software. Among them are Web Crossing, PeopleLink, Prospero Tech and eGroups. Where does Infopop fit in, and how do you compete with these guys?
O’Neill: These companies are approaching the market a bit differently than us. Web Crossing, for instance, tends to focus on high-end corporate accounts [it has fewer than 100 clients]. And eGroups seems to be more of a portal [you go to their website to participate in discussions].
Infopop has by far the largest installed base in the industry, with over 200,000 different clients. If you look at any standard measure of success–revenue, number of customers, profitability–we are ahead of the pack hands down.
Also, we are constantly innovating. In July, we introduced OpenTopic. Immediately, some of our corporate clients asked us to create import paths for their data from several of our competitors’ products. We take this as an indication that the market is looking for something better.
Seattle24x7.com: What’s your vision, and what makes you different?
O’Neill: We’re not going off and saying: “We think this is what the market needs.” We know people want our product. We’re getting 20,000 product inquiries a month, even though we’ve done no formal advertising.
Look, message boards aren’t just for breakfast anymore. That’s my glib way of saying people have pigeonholed message boards, often picturing a 15-year-old typing away in the basement. But message boards are actually community and collaboration tools. Most sites now have a button that says “community.” And you go to that area to “interact.” Our vision is that eventually there won’t be a community button, because the entire site will be interactive. Our tools will allow you to chat, respond to an article, buy a product. If e-commerce sites are really focused on their customers, they’ll have to let them talk to each other.
Seattle24x7: Let’s talk more about your specific products. What’s the difference between your Ultimate Bulletin Board (UBB) and OpenTopic (OT)?
O’Neill: The UBB is software that costs $199 upfront (includes one year of upgrades). The clients buy and install the UBB on their servers.
OpenTopic is hosted by our [Infopop’s] servers. This means we can deliver a truly scalable solution for our larger customers [as usage numbers increase, they get more server space], and offer improved features for everyone. Because we host OT, we can provide tight security and automatic upgrades. Also, there are no installation requirements.
Soon we’ll be adding email notification [ability to email users when something of interest to them is posted], and eventually chat and integrated auctions.
Seattle24x7: What else is good about OpenTopic?
O’Neill: OpenTopic is based on XML [see Ignoramus for XML explanation]. And it is the first to allow customers to completely customize the interface using XSL stylesheets. This is groundbreaking, in that it allows the interactivity of a message board to be totally woven into the fabric of an existing website.
OT lets users completely redesign any page to suite their needs. It can also be used to do polling, conduct visitor ratings, moderate queues, set up member-approval and flexible-security options, as well as conduct data analysis.
Seattle24x7: What’s a good example of customization?
O’Neill: One of OpenTopic’s clients is FT.com (the website of the Financial Times). They’ve done an amazing job customizing their discussion boards.
Seattle24x7: How much does OpenTopic cost, and how many customers so far?
O’Neill: We launched OpenTopic in July and have not advertised it. Still, we now have 200 OT customers. There are two pricing structures. Standard plans are priced on bandwidth. The least expensive is $24.99 a month, for up to 1.5 GB of bandwidth. Then we have OpenTopic Enterprise, which is an individually negotiated corporate contract.
Seattle24x7: Is OpenTopic meant to replace UBB?
O’Neill: No. We want people to have the product that suits their need. For instance, Dell.com currently uses our UBB. But if they need some new tools–like community metrics, membership integration, the polling feature–then they need OpenTopic. Actually, we don’t see those audiences overlapping. We estimate that about 10% [currently 20,000] of our UBB users will switch to OpenTopic.
Seattle24x7: What percentage of 200,000 customers are paying clients, and how profitable are you?
O’Neill: Some portion of the 200,000 are using our freeware product, whose purpose is to see if UBB can be installed on a client’s server. People frequently get our freeware and then soon afterwards buy a license.
Our revenue has seen steady growth–never flat or down over the last four years. It’s been a steady trajectory upwards. And we are profitable.
Seattle24x7: Do you have any patents?
O’Neill: Not yet.
Seattle24x7: OpenTopic is an ASP (it resides on Infopop servers, not the customer’s). So security is always an issue for customers. What kind of security do you provide to OpenTopic clients?
O’Neill: Lots. Our hosting operations are at an Exodus-secure facility. We use firewalls to protect the databases, and backups are in place to restore data if necessary. And customers have the ability to export their own data any time for any reason. The customer’s data are not accessed for any reason by Infopop, with the exception of our limited technical staff that maintains the servers and databases.
Seattle24x7: Some recent articles have claimed that the ASP model isn’t working.
O’Neill: Personally, I don’t think some ASP models have worked because many ASPs are middlemen–they’re providing someone else’s software online. We’re offering only our own software, and can handle all its usage issues.
Seattle24x7: You have lots of prominent high-tech companies as clients. But you’re kind of weak on high-profile online news and media. Why?
O’Neill: We actually have some very high-profile media clients, including Sony, Universal Studios, most of the major record labels and The Financial Times. We haven’t penetrated most of the popular news/advice sites mainly because we’ve focused on building a grassroots user base; we didn’t enter the market with a major ad campaign and Superbowl ads. But I think we’re slowly and steadily seaping into that market. We have a few deals pending right now with big media sites that I can’t yet discuss. If you look at the tools big media sites are using, they’re not really very feature rich.
Seattle24x7: You recently went down to Silicon Valley to meet with potential investors. How do you describe the current VC environment, and what will you use the VC money for?
O’Neill: Since the market has cooled off, we’re actually starting to get second looks because we are profitable and growing. The $10 million we’re trying to raise will be our first round of outside funding. This really isn’t a lot, given the scope of our operation. We’re seeking growth capital — for infrastructure costs and sales/marketing.
Soula Jones is Content Chief at Seattle24x7.com
1700 Westlake Ave. North, Suite 605
Seattle, WA 98109
Mailing address: 2030 Dexter Ave. North, Suite 244
Seattle, WA 98109
Year founded: 1996 (in northern Virginia)
Executives: Ted O’Neill, CEO/founder (formerly Director of Digital Media at Computer Associates and independent software developer/consultant).
Rosemary O’Neill, Executive VP (a marketing communications specialist, formerly with a subsidiary of Dow Chemical; wife of Ted O’Neill).
Michael Moore, President and Chief Marketing Officer (formerly with Coca-Cola, Kraft Foods, Knowledge Universe).
Nitesh Mehta, Head of Business Development (formely with iSyndicate and Amerindo Investment Advisors).
Peter Bryant, Chief Technology Officer (developed for Unisys, Fidelity Investments and NEC).
Job openings: four (see their website)