I recently had the opportunity of meeting Ross Fobian, the co-founder and CEO of ResponseTap, a start-up offering call analytics to digital marketers, helping them understand the sales paths their customers take by linking phone calls to online journeys for every website visitor.
Ross shared how the idea for ResponseTap came about, his journey so far and plans for the future.
Hi Ross, Thanks for doing this. How are you doing today?
I’m very well thank you. I have just come back from a much needed holiday.
Tell me how you initially got into business?
I was a studying for a Masters in electronic engineering at the University of York and came across the story of Alex Tew and his now famous ‘Million Dollar Homepage’ idea. I was fascinated by his idea and the emerging disruptive world of internet advertising and decided to start an internet auction site to help newspapers and magazines sell their remnant advertising space. It worked out OK, but I think I was a bit scary to the old established publishing industry and this first business didn’t move as quickly as I wanted.
How did the idea for ResponseTap come about?
Like many great ideas, we came up with the concept for ResponseTap over a pint in a University bar. Whilst chatting with a friend, Richard Hamnett, about our respective online businesses, I posed the question, ‘wouldn’t it be great if we could analyse phone calls in the same way as web clicks.’ Richard replied, ‘I can do that’ and it went from there. Once we graduated we wrapped up our businesses and set about developing the product. The product was developed and out to market within four months.
Tell me about the early days, what was the hardest part of starting the business?
The lack of finance and the stresses that come with it. We didn’t pay ourselves a salary for the first nine months. In hindsight we should have got finance first, it would have made our lives a lot easier, as it would have given us the foundations to grow the business a lot quicker.
What is ResponseTap? And what are you trying to solve with it?
ResponseTap believes in smarter marketing. Smarter marketing is about investing your resources in the channels that are proven to generate sales. 65% of businesses consider a phone call their highest quality lead source, meaning understanding what makes the phone ring is critical. Yet, marketers are typically ‘flying blind’ when it comes to understanding their phone sales.
We offer call analytics for digital marketers to solve this problem, helping them understand the sales paths their customers take by linking phone calls to online journeys for every website visitor. Which search keyword did they originally enter? Which offer on your website was the clincher? Are phone sales worth more to you than web sales? Digital marketers use this intelligence to make their marketing budgets work harder and make operational improvements.
How have you been able to fund it so far?
At the beginning, Richard and I were funding the business using the profit from our first businesses. We simply had to start generating income. We were able to convince some first customers to give us a go, helped by the fact that at that point there was no one else could solve the issue, and we grew from there. We did then get VC funding further down the line.
What advice can you give to entrepreneurs looking to raise funding for their start-ups?
Raise the money first! We were lucky enough to have profit from our previous businesses to invest, but we were flying by the seat of our pants at times. A bigger up front injection of cash might have helped us move even more quickly and would certainly have reduced some of the stress we encountered.
About the first few months, how excited were you, tell us about how those months felt, what happened?
We knew that we were on to something big, so there was naturally a lot of excitement, but at the same time, we were working hard to develop the product. We were helped that we were able to get the first version out to market after four months. This was pretty quick, and we knew it was a pretty rough and ready version, but it was essential.
How did you initially get traction?
Our first customers started to see some instant results and were immensely helpful in also being very honest with us about the shortcomings of the product and the features they wanted to see added to make it even more useful. We took this feedback on board and used it to create an improved version, which got us talking to some digital agencies and one of those helped us land a huge household name.
What are the most crucial things that you have done to grow your business?
In early 2011 we started looking at the next phase of growth, and targeted the US market for our first international expansion. The market for what we do is 17 times greater in the US and so it was a natural step.
But to do this we needed outside investment and so in April 2011 Stephen Taylor came on board as our chairman. He was formerly CEO of Qype, growing the business from five to seventeen million unique users per month, and previously he was Regional Vice President and Managing Director for Yahoo! Europe, with responsibility for all aspects of the European Consumer business. He added a new perspective to our business – he has an immense amount of experience of fast growing companies and because he was a step removed from day to day running of ResponseTap, he was able to advise us on bigger picture stuff.
What would you say has been the highlight of your entrepreneurial journey so far?
There have been many highlights – from the first release of the product, to the amazing feedback we got from customers. Overall though, I get a real kick out of seeing the company grow and the way we’re able to give opportunity to really talented people.
What should we be expecting from yourself and the ResponseTap team in the next coming months?
We have just hired a new CMO who has a wealth of big brand experience in similar industries and it marks an exciting chapter for us. We’re planning for further international expansion into new markets, including the USA. We’re expecting to grow by 200% in this financial year. The following financial years are going to be much bigger due to our capital expansion and expecting 400-500% over the following couple of years.
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
Get a proof of concept or an early product to market quickly – don’t wait until you think you have the perfect product, as you will never get to that point! Having something for customers to try out is an invaluable way to get real feedback that you can work back into improving the product
If you’re thinking of starting a business, do it early – before you are tied down by personal commitments
Make sure you have enough money to fail a few times. You won’t get it right first time - mistakes can be costly, but are essential part of the learning process