Unusual marketing step to launch global technology
Monday, September 18, 2006
New Zealand software company takes unusual marketing step to launch global technology
Christchurch company, VortexDNA has a mathematical algorithm it claims can improve the relevance of everything from search engine advertising to finding the right job. But that is just the problem – with a technology this big just how can they to get it to the world?
Like the algorithm itself, the answer may be deceptively simple: just advertise for a Business Partner to commercialise the technology for you.
After trying almost every traditional route to market, VortexDNA is taking the unusual marketing approach of recruiting a Business Partner to manage a global network of independent representatives.
“We’ve tried marketing the technology ourselves” says VortexDNA director Raf Manji, “that got us our first clients. But we realised that we are essentially an R&D operation. As the scope of the technology grew we saw that taking the technology global was not something we were going to be able to do on our own.”
The company joined up with Nick Gerritsen of Crispstart, a knowledge broker with an impressive track record in flipping New Zealand technology into the United States. Gerritsen joined the board of VortexDNA and introduced the company to his US network.
“During two trips to Silicon Valley it became clear that ‘relevance’ is the word on everyone’s lips. >From Google to start ups like Gusto! and Simplyhired companies are seeking to make their offering more relevant to users. VortexDNA offers a new approach to the problem.”
The traditional route to market would have been for the company to team up with a venture capital firm and set up a US operation.
”This is still an option for us” says Gerritsen, “but we like the Business Partner approach better. It’s got more upside with less opportunity cost.”
The company has advertised for a Business Partner to run the commercial aspects of the company.
“They can be based anywhere,” says Manji. “They can even be a company rather than an individual. We provide them with the technology and it is their job to commercialise it.”
This may sound like a traditional licensing model, but VortexDNA has refined the concept.
“The Business Partner is part of VortexDNA,” explains Gerritsen. “They own equity and have a seat on the Board. But they aren’t the delivery system, they manage the delivery system. The delivery system is a network of independent representatives around the world, from Sydney to Singapore and New York who do the deals with major users of the technology.”
VortexDNA is not planning to pay their independent representatives a salary. They hope the appeal of the technology with generous commission and equity in the company will be enough to encourage people to join up.
“If we went the traditional venture capital route we would have to give up a big chunk of equity and still have find people to commercialise the technology for us,”says Gerritsen. “This way, the people doing the deals get the equity. That seems fairer and it’s a lot less work for us.”
Already, entrepreneurs such as Maggie van Rooyen, have found the independent representative proposition appealing. “It fits with who I am,” says van Rooyen. “I have and extensive network in South Africa and in the US where it would be easy for me to present VortexDNA. The independence VortexDNA offers me, as well as recurring revenue from the deals makes it sound good. It’s not a business that needs a lot of capital to make it work.”