David Cancel: I Want Performable to Be the Salesforce.com of Online Marketing

2/14/11Follow @gthuang

Performable is one of those startups that sounds cool, but who really understands what it does? Until recently, not that many people outside the Cambridge, MA-based marketing technology company.

To learn more, I met with David Cancel, Performable’s founder and CEO, at the startup’s cavernous new digs near Central Square. As he admits, marketing technology is a “non-sexy” topic that’s not easy for laypeople to grasp (or journalists to write about). But that has also allowed the startup to stay mostly under the radar while it has grown to about 15 employees and hundreds of corporate customers.

In a nutshell, Performable makes software that helps companies automate marketing processes and sharpen their marketing analytics down to the level of individuals and actions. That means—unlike Google Analytics, say, or other big players like IBM (with Unica and Coremetrics) or Adobe (Omniture)—Performable tries to provide information about how each consumer interacts with a given brand across different websites, social media, and devices.

It’s a much broader vision than the Web page testing tool that Performable was originally known for, though Cancel says that tool is still a significant part of the company’s revenue. (About a year ago, my colleague Wade wrote an in-depth story about the early days of Performable and its genesis based on Cancel’s previous experience at Compete, the online marketing firm that he co-founded.)

Performable sends customers a daily e-mail that reports activity and trends happening with their websites. Through a software-as-a-service model, customers install a Web analytics tool and a marketing content management system (which includes the landing-page testing tool). The software tracks and displays each interaction with each customer—with special attention to which Web pages, e-mails, or phone calls generate clicks and revenue—and provides specific recommendations for how to boost things like conversion rates and search-engine traffic.

The startup is part of a growing mini-cluster of marketing-related tech companies in the Boston area. Others include Hubspot, Constant Contact, DataXu, Crimson Hexagon, Lexalytics, Bluefin Labs, and oneforty. (But the most similar startup I’ve talked to is probably Optify in Seattle.)

Here are a few highlights from my chat with Cancel:

On his biggest lessons learned in the past year:

“We avoided growing, avoided press, and spent all of our time with customers,” Cancel says. “We stayed three people for almost eight months. We focused on product-market fit.” He says Performable “experimented early on with lower-end customers,” which turned out to be a “wrong match,” and that the company “wasted some time there.” It has since raised its pricing and removed its smaller subscription plans, which seems to be working out better.

On what the real opportunity is in marketing analytics and automation:

“There’s a massive market served by older companies, which have not innovated,” he says. “They haven’t moved to [address how an] individual is going to interact with a brand across different channels. You have to have a user-centric strategy. That’s what they haven’t done yet.” He adds, “I want to be the Salesforce in that space. Google owns the long tail. But in the enterprise space—integrating into [existing] systems, multiple channels—we can own that.” (Cancel would probably be the first to admit that will take a lot of time and effort, though.)

On Performable’s biggest challenges and potential obstacles:

“Selling, positioning, and scaling the company,” he says. “We could grow too fast. We could go down a lot of rat holes.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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