Stanford EntrepreneurEntrepreneurship isn’t a career, it’s a way of life

ETL - Brett CrosbyFiled Under: ETL, entrepreneurship

Brett Crosby, today’s speaker, was one of the most personable guys to come to ETL. Not only did he discuss his background in doing business and college stuff, but he also picked out the nuggets of wisdom he gained along the way. In a nutshell, Mr. Crosby started the web analytics company Urchin with his brother and a couple buddies from college which eventually was acquired by Google and is now known as Google Analytics. Also, here’s the full clip if you’re interested.

Background

Scott and Brett Crosby, brothers, were the co-founders of Urchin. Brett played a large role in writing the original business model, coming up with product plans and features, and developing the sales team. The idea was to create a great product that was easy to use and didn’t require a ton of support. They originally built the business around a scalable product that allowed them to target hosting companies and get a massive number of users in one deal. Brett currently works as a Group Manager of Google Analytics. He is responsible for product positioning, feature roadmap development and all external product communications. Brett also graduated from the University of Souther California with a degree in Political Science and International Relations.

The Early Years

Urchin started out as an internal tool to measure bandwidth for websites. Brett did website design and hosting from 1995-1996, and at that time bandwidth was expensive. Shortly after that, the web hosting business became Quantified Web Systems, Inc. and sold the parts of the original business that weren’t related to analytics. The reason being is that Honda was spending $6 million on their website, not getting much information, and after trying Urchin, they realized they had a product that worked amazingly well.

Change Until It Works

After that they became Urchin Software Corporation and offered a suite of products because that is what everyone else was doing at the time. The only problem is they didn’t do any one of the products well, so they dropped everything except Urchin. Then, in 1997-1998, when Earthlink was huge, Brett sent three emails to Earthlink asking them to try Urchin. The first two times he didn’t get a response, but on the third time, one gentlement asked for a demo and a whitepaper. At the time, they didn’t have either, but they developed both in a quick hurry. After having a meeting, they won Earthlink over and the revenue model them became to pay Urchin for paid customers and have banner ads for the free customers. Whe Earthlink started closing down, Cable Wireless became the next big hosting company and had major websites like Coke and American Airlines. By proving their scalability, they ended up landing their first seven figure deal. Lesson learned: go after datacenters!

Dot Com Bubble Bursts

Throughout their period of growth, Urchin was focusing on getting more revenue, but they were still operating at a loss. They were going through rounds of funding, and it was at that time the bubble burst and they realized the problem of little or not profits. To keep the company afloat, they cut salaries, closed their Tokyo office, and changed their business strategy yet again. They went from making deals in six months with all kinds of clauses to one sheet of paper. The deal was to pay $5,000 per day, and you could use Urchin’s software as much as you want. The goal was to become the most widespread and dominant analytics tool.

Developing a Strong Brand

The next business move was to switch from installed software to a web based system. They started to mature the brand by getting a good copywriter and graphics guy to create a strong image for the company. The idea was to look bigger than you are - which is important for people to take you seriously - by elevating the look of the company as well as creating decent booths when getting involved with the circuits.

Google’s Acquisition

At Search Engine Strategies in San Jose of 2004, Wesley Channon (Google Adwords Product Manager at the time) came up to Urchin’s booth and asked what Urchin was all about. Mr. Channon initially lied about who he was and it was only until Brett went to a party hosted by Google that he found out who he was. It was also during this party that Brett suggested that they should be acquired by Google. At the time, Urchin had $1 million in the bank after a 2-3 year turnaround. The company had turned extremely conservative due to the dot-com bust and never wanted to have the problem of laying off people again, and as such, they had a lot of money and looked very good from a revenue/profit generating perspective. They were in talks for nine months longer than they thought they would, and it wasn’t until April 20th of 2005 that the deal was closed.

Lessons Learned

1. Go big (biz models, acquisitions). Make the product as easy to use as possible and do whatever you can with the product you have.
2. Keep it legal. There were many dot-coms that did deals that made revenues and balance sheets look much better than they were. Because Urchin didn’t partake in these deals, he feels they stayed out of some unnecessary trouble.
3. Build a great team. One story to elucidate this point was when Brett asked their main engineer if they could make Urchin’s software work on Windows. The engineer said it was impossible, but then Brett said a $1 million deal hinged on this development. That said, the Windows based product was made over the weekend.
4. Act big, stay humble. Three of them were sharing a room at Ramada to cut expenses. They also carried their stuff onto a plane vs getting a private plane. Instead of hiring people, they would also set up and take down the booth by themselves.
5. Try new business models. As discussed above, they went through many different business models until they hit the one that resulted in the best results for them and their customers.
6. Celebrate the crazy moments. Sharing these times with friends makes life more enjoyable and shows that you are having fun while doing the work.
7. Don’t give up. Even when times are tough, it is usually by getting through these times that the huge payoffs occur.
8. Be flexible (work on your business not in your business). One of things Brett did was to learn how to do one job, such as web development, and then hire someone to do that and move on to another system. This is great in the respect that you understand how each system works within your business and you continue to grow it as you move on to different systems.
9. Use what you’ve got. For some reason, a lot of country music stars were using Urchin on their websites, and by working with stars such as Faith Hill, Urchin was able to develop ads for their software.
10. Work with people you like. When asked how Brett manages personal and business relationships, he said that he didn’t want anything to do with the business personal and instead wanted people he could connect with and were real to him. As such, most of the people he went into business with were friends and this has allowed him to have fun doing what he wanted to do.

Conclusion

Brett was a great example of showing that you can and should be yourself when getting involved with business. While there are certain aspects of your life that should be kept out, your personality shouldn’t change. I also had the incredible opportunity of going to dinner with him and his brother. While most of the discussion was chitchat, one thing I did learn is that both of them failed at a couple of businesses before starting on Urchin. They also both felt that the failure was immensely useful later on in their business careers. Overall, great speaker and someone I feel I could learn a lot from if I met with him on a regular basis.