“What new technology does is create new opportunities to do a job that customers want done.”
-Tim O’Reilly, founder of O’Reilly Media
Technology has created a new type of venture, digital ventures. As the internet and technology become more and more part of our lives it is essential that businesses take advantage of them. Brad Pace has been a part of 8 successful digital ventures that we discuss in today’s episode.
Brad Pace is a former business partner of mine. We were partners in SocialNexus, where we did a lot of work creating digital ventures with Brazilian companies. He has also worked on many other successful digital ventures, including Ancestry.com, MyFamily.com, About.com, Finicity, World Vital Records, and more. He is currently the president of TeamDial.
Early in his career, Brad heard about Ancestry and decided to go work there. He was their 30th employee and one of the first developers working on myfamily.com. Myfamily.com became very successful, one of the top ten most-used internet sites. It was one of the first photo-sharing sites. At the time Myspace was one of the only other social networks, but people weren’t sharing photos there, and MySpace didn’t have a lot of the traditional social networking features. Brad and his coworkers made it really easy for users to share photos between them and their extended family. They had more photos shared on their network than anyone else on the internet. At the time, it was the second-largest subscription service on the internet. Also at Ancestry, Brad helped build the first online family tree.
In the year 2000, About.com was very popular. About.com had guides who published content on hundreds of topical sites. They specialized in human-curated content and it was one of the top five internet properties. Brad worked for a company that had been purchased by About.com.
After About.com, Brad worked for Finicity, an online budgeting system. Their system was based on the envelope budgeting system when you have an envelope with your budget for food, an envelope for spending, etc., and can only spend what is in the envelope. When most people stopped using physical money, Finicity was the first to bring the envelope budgeting system online. However, they didn’t have a platform mentality. Finicity thought their value was in the subscription to use their software, but the actual value was in the data they were collecting. A new company called Mint came along, offering the whole thing for free, and then monetized with the data. Mint had a platform mentality and understood the value of the data they were collecting. Brad stressed the importance of entrepreneurs today having a platform mentality.
World Vital Records & We’re Related
While Brad was working for Finicity, the founder of Ancestry called Brad and told him about a new business he wanted to start. Brad joined him and they co-founded World Vital Records, a company similar to Ancestry, but instead of owning the content, World Vital Records leased it. With this system, they were able to approach content owners throughout the world who had refused to sell to Ancestry. World Vital Records leased the content, putting it in their database and paying the content owners a percentage based on the content’s usage. World Vital Records monetized the family history records by selling subscriptions to members.
Around this time, Facebook announced that they were going to let third parties develop on their platform. Brad and his cofounder decided they were going to build an app for Facebook that customers could use to connect with their families. They called the app We’re Related. At the time, you couldn’t go on Facebook and say this is my dad, brother, mom, etc. In a short period of time, the app reached more than 60 million users and became the fourth largest Facebook app based on the number of app installs. They received an offer to buy from The Walt Disney Internet Group because of this success.
However, this is a perfect example of building a skyscraper on someone else’s land. After Facebook saw the success of We’re Related, they implemented some similar functionality into the core Facebook offering. Then, they implemented new policies to make it very difficult for We’re Related to compete. The parent company of We’re Related ultimately sold their assets for an amount far less than what Disney had been willing to pay.
We should do our best to build our ventures on land or platforms we can control. If we do build our ventures on someone else’s land, we should also build something on a different piece of land that we own, and working to drive people from the leased land to the land we own. Entrepreneurs almost always underestimate the risk related to building their business on other platforms or leased land, and this often is very destructive.
After World Vital Records, Brad went on to co-found SocialNexus. At this venture, Brad and I helped build several digital ventures in Brazil and built niche social sites. We funded the business by doing consulting work and put much of the profits back into the business to build our own sites. In our consulting work, we helped Brazilian companies to take concepts that were working in the US and roll them out in Brazil. This is a monetization model called “cool hunting.”
Partner Fusion and TravelPass
After we sold SocialNexus, Brad became one of the 6 founders of Partner Fusion. Brad and his partners worked in the travel and entertainment space but wanted to pivot into being a platform and product company. Partner Fusion began by working in many different verticals, such as hotel booking sites, airline ticket sites, show tickets sites for Las Vegas, health and nutrition sites, etc. They tested all these sites and ran with the best one which was in the hotel space. After that, they focused on selling hotel rooms and changed their name to TravelPass. They sold hotel rooms to big online travel agencies (OTAs) like Expedia, Priceline, and Booking.com and became an OTA themselves.
In spite of competing with these large OTAs, TravelPass had a lot of success. They were able to compete with companies like Booking.com–which buys more ads from Google than anyone else in the world–because they were scrappy and agile; they had the flexibility that Booking.com didn’t. They were also paying attention to the small details and therefore knew their customers really well. Another key element to their success was their platform. Instead of regurgitating 500 results as other platforms did, their platform pulled hotel inventory in, figured out who had the best price, and gave that price to their customers.
They doubled their growth every year, and in 4 years they grew it to $450 million in annual revenue, doing $1.5 million in bookings every day.
After TravelPass, Brad moved on to Soar.com, a company that helps coaches run their businesses. Brad had never had a coach before, but he quickly learned the value of having a personal coach, whether it’s for your business, personal life, health, etc. Soar.com built their platform so every coach could run their business as a small business. Many didn’t know how to manage their business or understand who their target audience was. To help with this, Soar.com provided master classes, zoom conferencing, billing, and help with marketing.
At the same time, part of Soar.com focused on voice technology with an app for Amazon Alexa and other virtual assistants. One of Soar.com’s customers was one of the top sales training companies in the world who had a lot of content (hours of video, voice, etc.) that would sit on their website unused. Brad and his associates made all of that content available to them by building an app to provide the best info through voice technology. With this app’s great tagging and searching technology, their customers are able to ask their virtual assistant things like, “What are the four sales techniques that I need to use?” and it will play the audio that they are looking for.
Users can also upload their own audio. Brad uploaded a recording of his grandfather from the 1960s singing songs at his 80th birthday party. Brad was able to play this for his day by simply saying “play Grandpa Western.”
Brad’s latest venture is a startup company called Teamdial. A friend of his had been running and building technology for a call center for more than 8 years. Brad came in and suggested that they make this software self-serve. TeamDial allows people to organize and make their outbound calls from their small team. They have realized that even with social media, email, and texting, the best way to connect to customers is still through voice.
Thank you so much Brad for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:
1. As Brad did with Finicity, we may be able to take something that works in the physical world and transfer it into the digital world.
2. As with the, We’re Related Facebook app, we should build skyscrapers on the land that we own, and avoid building our skyscrapers on leased land.
3. Brad and I both had connections to Brazil before doing SocialNexus. We can find successful concepts or products from one market and use our connections to take them to another market. This is called “cool hunting.”
4. Just like Partner Fusion/TravelPass tested many different verticals and then decided to focus on hotel bookings, we can also test different opportunities, and then focus on the opportunity that proves the most successful.
5. We can add new product lines by selling coaching to our existing customers.
Connect with Brad
If you enjoyed this interview and want to connect with Brad or his business, you can find him on LinkedIn at https://www.linkedin.com/in/radpace or visit his company’s website at https://www.teamdial.com/.
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