Mixergy, Darrin Clement of Maponics

Mixergy, Where Ambitious Upstarts Mix

Guest: Darrin Clement , Founder of Maponics

Maponics is a true service firm, ready to work with you to meet your company’s needs. We have high ethical standards, so you know you will be treated honestly and fairly.

By outsourcing mapping-related projects to us, you can save your organization the typical investment in software, data, staff, and training required to create beautiful and accurate maps. We bring years of experience to your projects, freeing you up to do what you do well. There’s no need for you to know anything about mapping to work with us.

Thousands of businesses rely on us for mapping services. Many of them are small companies around the country.  Others are well-known Fortune 500 firms.  A few of our clients are listed to the right.

Maponics provides unique mapping solutions to many clients and we will work with you to determine what will succeed best.

The Learning Curve:

• What was Optiwave? My first adventure in a startup, a consulting business, he had no sales or marketing skills and learned that he lacked a plan for revenue, the life blood of any business.
• What kind of consulting were you doing? Helping companies design fiber optic assemblies.  He had about 2 contracts and thought his problems were that there wasn’t enough money in consulting but later realized he lacked the sales skill.  He formed a partnership with a buddy that was a software engineer and didn’t gain a single customer, still no sales or marketing skills.
• What was it like to decide to close up shop? He met his future wife and knew kids were coming and the reality of life made him realize a job would provide for them.
• Andrew comments that closing his companies was difficult; he remembers worrying about what his friends would think.  Did that go through your mind? Absolutely, it’s hard to admit failure and especially the ego that goes along with a personality that wants to start their own company.  He felt he had higher responsibilities (his new family) and so it was easy to explain.  However, he know will admit his companies sucked.  He also understands that some people hold on too long and it makes letting a business go even tougher.
• Darrin says, part of the ability to be successful as an entrepreneur is that optimism, a certain amount of self-deception can be very effective.  He is proud of the fact that he realized why he failed, lack of sales and marketing skills but didn’t dwell on the fact that he failed.
• Did you start any more companies before Maponics? Yes, one he calls a strategic placeholder, he knew he did not want to work for some big company.  So he mapped out his plan, he worked at one company doing fiber optic diode assembly design and worked his way into a product marketing engineer job and then worked his way into product marketing for a software company.  His family moved and he knew he needed a few more skills before he felt he was ready to do a startup.  He worked as head of product development at Geographic Data Technologies.  Andrew refers to this process as creating his own MBA, Darrin would have gone back to get an MBA but finances were an issue, so he read a lot to fill the gaps in his experience.

Startup:

• What was the original inspiration behind Maponics? One day, jogging he had the epiphany, what it would be, how it would work, exit strategy.  The basic premise was direct marketers didn’t have a great way to target customers.  He gives an example of if you wanted to target customers within 10 miles of your store they would get you all the zip codes in that area.  The problem was is some zip codes are really big and you end up marketing to more than your target customers.  Maponics started out with carrier routes a form of sub-zip codes that mail carriers follow.
• How were you going to get your customers this time? Marketing not sales.  He figured out how to optimize his web site and use paid ads and things started to happen.  People were calling him, he didn’t have to ask friends for referrals.
• What size orders were you getting from click ads? Roughly $30
• How did things go? He wanted to start out small and have no overhead so he worked out of his house.  Within three months he was having a hard time keeping up with all the work.  After 10 months he moved things out of his house and started to hire people.
• How do businesses use a map to find where they are going to send their mailers, don’t they need the actual addresses? Yes, they do but Maponics was the middle man.  Darrin feels that there is still a lot of money to be made in the middle even when companies are cutting back, companies still need to get stuff done.  The way it works is a business would call a list broker and want mailings sent to everyone within 10 miles.  However, if that business had seen their marketing they may ask the list broker to only target certain carrier routes.  List brokers wouldn’t know these routes and the business would have to go to Maponics to get them to give to the list broker.
• Where were you getting your data? His former employer Geographic Data Technologies he licensed from them
• You had approximately 10 people hired before things started to level off? Yes, from that revenue stream.

Success:

• What size of revenues were you doing? Under a million but they were profitable.  They then created an online store so customers could self serve what  products they needed this provided needed growth without adding a lot of staff.  Before that, in order to get a map, a customer would have to call Maponics to get a map.  The idea of automating seemed a daunting task (these are not the same type of maps you get from Mapquest) and the returns weren’t large and in order to create a useful map communication was usually necessary, but automating paid off.
• Andrew comments that more often than not the successful companies start out slow like Maponics and then automate, How did you automate? Darrin jokingly says he wasn’t involved, he learned the lesson that he didn’t have to have his hands in everything, so they hired someone to take on the task.
• How did you know he would be the right person? When it comes down to it you don’t, you can get better at hiring and be systematic but in the end you just don’t know.  In this case, the person (Cory) had the passion and technical background to succeed.  The only concern then is personality issues at Maponics, Darrin has all potential new hires meet all the staff.
• Can you explain more of the task of automating such a large project? They scoped out the project (outcome, functionality) but their past data was extremely useful.  They could ask themselves in the last year what type of maps have we made?  A commonalty was identified and how can we make rules to fit those areas.  Critical to its success was that customers wouldn’t see degradation in quality of pre-automation vs. automation.  The past sales data led to success, you can have all the technical knowhow to automate but how do you know what the customer wants?  Andrew comments that he has talked to other technical companies that ask all their employees to take customer service calls, to learn what they want.
• How much did the business grow when you automated it? Approximately double the company in about a year and a half, which was tough in their niche.
• Besides buying ads what other marketing were you doing? He when to a lot of trade shows trying to establish relationships with the list brokers and was even laughed at by brokers, not understanding how maps played into their service.  Tried direct mail to businesses but the return on investment was too great.  He went and got professional sales training which was difficult to swallow as the owner of a company but learned the technique.  He learned that you have to learn what the customer’s pain is before they will give you money, you must connect with that pain.  How did you find that out? By asking good questions.  Is their one question that works well?  How are you currently getting your customers?  So if you had a better idea of where they were located how would that help your business?  Try to get them to talk and visualize what life would be like with their problems solved.  He used Sandler Sales Institute he felt the methodology was a good balance of soft and hard sale, he learned that you need to be assertive and ask for the sale.

Failure:

• What was the next milestone? Failure, after automating and making money while they slept they got a custom project from a customer that was flash based and they did it, ok so where is the failure?  They fancied themselves application developers ( big money compared to what they were doing) but didn’t realize they weren’t developers.  They tried to get investors but never got a terms sheet, luckily, it never happened because at that point Google opened up their API and no one cared about flash map.  This was the first time they went into the negative as a company intentionally and Darrin felt he spent too much time with investors learning nothing.
• After Google and Yahoo! opened up their maps, what did you do? They shut the product (flash maps) down it was probably the hardest period for Maponics.  They had to lay off 3 people and letting someone go for something that wasn’t their fault was very tough.   However what Darrin learned was that if he had maybe pulled the plug earlier he may have had to lay-off only one or two people.

Redefining the Business and Success:

• Ok so you refocused on your core business but you added it what did you do next? We didn’t refocus, we cut-off a product line.  The saying as a door closes a windows opens, Darrin feels it is true, if you keep an open mind opportunity exists.  In reviewing what customers wanted they realized neighborhoods were the key for businesses, in most places it was it was tough to figure out boundaries.  The customer who wanted the first flash map had created a few neighborhood boundaries and wanted to shed the asset, Maponics believing this had potential and was able to purchase the product.  They knew map data and knew they could license this work that led to the success of Maponics.
• Their customer base changed in the transition to neighborhood maps and licensing, no longer was it mom and pop dry cleaners it was Google, Citysearch, etc.  which led to a better end user search experience.
• How do you get in the door of Google and some of these big companies? Darrin compliments his VP of Sales, Mark but will take credit in helping turn things around.
• How did you know who to call at Google and these big companies? Pure cold calling, asking some questions and trying to figure out who it is you need, at Google he talked to approx. 15 people before he got the right person.
• How big is the company now? Still less than 30, revenues are under 10 million.  Darrin is co-owners with Steve and Mark.  When looking for good talent equity may be the way to attract them.
• How does someone with a family (not a 20 something) start a business? Your spouse must be on board.  There must be some boundaries (when you have kids) where you engage the family in your downtime.  Kids just want their dad but try have them recognize the benefits of him being away sometime but present in others, when other dad’s aren’t around.