Supporter of Seattle Startups Raises $800K for “Social Analytics,” Wants To Improve Your Website

10/31/08Follow @gthuang

One of the most influential people in the Seattle tech-innovation scene doesn’t even live in the area. He’s Neil Patel, and if you’re in the Web analytics or Internet marketing business, you already know who he is. That’s because Patel has done marketing and search engine optimization for everyone from giants like General Motors, AOL, HP, Samsung, and Viacom to fast-rising local companies like Wetpaint. He has tons of business in the Seattle area, and he also has some funding news about his own company.

Instead of the drizzly Northwest, Patel makes his home in warm and sunny Orange County—Buena Park, CA, to be exact—where he’s lived since he was a kid. Except he’s still a kid. He’s only 23 and technically still lives at his parents’ house, though it’s mostly a practicality because he travels about three weeks of every month. Still, he knows the ins and outs of Orange County and isn’t in a hurry to move. (I can almost imagine him saying, “Welcome to the O.C., b***h.”)

I chatted with Patel a couple weeks ago after I learned he was a limited partner in Founder’s Co-op, the Seattle seed-stage investment fund. Patel says he comes up to the Northwest every month. “It’s my favorite place other than Orange County. There’s much more investment going on,” he says. “I do more in Seattle than in most places.” For starters, he is an investor in a few area companies, including Bothell, WA-based Sandlot Games and Seattle-based EvoLanding, a media network and website developer. He also serves as an advisor to companies including BuddyTV, ICanHasCheezburger.com, CultureMob, and LiquidPlanner.

Patel is also the co-founder of the marketing companies ACS, Crazy Egg, and Kissmetrics. He gave me some news about Kissmetrics, an analytics startup that he spends most of his time with: it recently raised $800,000 from True Venture and other investors. (To his knowledge, this hasn’t been reported anywhere else.) The model for his virtual company is low overhead and small offices: the eight employees are spread out in places like Australia, California, Chicago, and Eugene, OR. “I’ve done so much marketing for these investors, it doesn’t take much to get money,” Patel says. “The VCs let me do whatever I want…The guys have their own startups, so they themselves are used to doing multiple things at once.”

Patel explains what makes Kissmetrics different from other analytics sites that tell you how your website is performing. “All these sites out there, there’s all these solutions, and all they do is traffic stats,” he says. “None of them tell you how to improve your site.” What Patel’s company does is “social analytics”—it tells you “here’s the users interacting, here’s the users commenting, here’s where they come from,” he says. It tells you how best to target visitors who come back three times, say, or how to increase your page views per visitor, or what your “viral growth rate” is. “If you’re an e-commerce site,” he says, “here’s the visitors who are converting, here’s who’s not converting. You might try X, Y, or Z.”

The plan is to start the beta phase in early December, and make Kissmetrics available to the public by the end of January. Patel’s goal, he says, is to “get millions of people” using his analytics software.

But how did he get to where he is so fast? That’s an interesting story. Patel says he started his first company in high school, when he was 16, with the help of business partners and his sister. “I hate school religiously,” he says.

His first company was an online job site to compete with Monster.com. It didn’t work out, because it got no traffic and it didn’t take credit-card payments. “I paid Internet marketing companies, and got screwed over,” Patel says. “They didn’t do much. So I learned it myself.” Soon thereafter, he was taking a speech class at a community college when he met a classmate who was a sales rep from ElPac, an Orange County-based electronics company. “He said, ‘Hey, you should work for ElPac,’” says Patel.

ElPac was bringing in more than $20 million per year, Patel says, and asked him to help boost its Web traffic. By optimizing webpage codes for search engines and hitting up other sites for links, he helped more large companies find ElPac and then buy electronics from it in bulk. The company paid him $3,000 per month for about 10 hours of work. “That’s a lot for a 16 or 17-year-old kid,” he says.

The pay may have changed since then, but not the mission: to help companies find more customers online. “We focus on the website itself,” says Patel.

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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