Marketfish Raises Cash from Alliance of Angels, Looks to Elbow List Brokers Out of Lead-Gen Space
[Updated Aug 27, 11pm PT, with clarification about the list marketing and lead-gen process (see below)]
A stealthy Seattle startup in online marketing is starting to generate some buzz around town. Marketfish, which recently moved into new offices in Pioneer Square, has raised an undisclosed sum from private investors, led by Seattle-based Alliance of Angels and including Bellevue, WA-based Atlas Accelerator. Now it is aggressively putting the money to work, scoring a lot of new customers and hiring staff as it gears up for a beta launch of its Web service early next month.
Marketfish is led by founder and CEO Dave Scott, who was previously chief marketing officer at Seattle-based Entellium, the company that imploded last year in an accounting scandal (which was blamed on executives who were above Scott’s pay grade). Before that, Scott was head of marketing at Intermec and PeopleSoft. In his first media interview about Marketfish, he declined to say how much funding the startup has received, but said, “We think we’ve raised enough to get to break-even.”
Scott founded the company in July of last year. He initially tried to raise money in October, but was unsuccessful. “I liquidated my 401(k), sold my car, and buckled down for six to nine months,” he says.
Here’s the problem Marketfish is solving. Say you’re a big company like Dell, and you want to market yourself to small business owners. Today, as the head of marketing, you’d go out and rent a list of potential customers from Forbes, Fortune, or Inc., say, and get a list broker to represent you. They call all the list managers, at firms like Worldata or InfoUSA, and negotiate a deal. It’s all part of list marketing—using a third-party permission-based list to launch lead-generation campaigns. “The process today is extremely painful,” Scott says. “It’s really hard to measure, and it’s all manual.” He adds that the whole process can take something like 24 days, and is done over the phone. [See Scott’s clarification of the process in comments section below—Eds.]
Marketfish is trying to automate all that by creating a Web platform, similar to Google AdWords, that could potentially cut the time down from 24 days to 30 minutes—and make it much easier to measure the performance of an ad campaign. It does this by providing a patent-pending Web interface where marketing agencies can work directly with list owners. “We’re trying to create a marketplace,” Scott says. “We want to create trust between the two.”
Using the Marketfish site, a marketer can directly find the lists he or she wants online, add them to a shopping cart, and be done with it. Marketfish takes a percentage cut of the revenue from each transaction (which Scott didn’t disclose). Scott says the company already has 30 customers—with 20 more on the waiting list—including 19 of the top 20 marketing agencies in the Seattle area.
Previous companies like NextMark and min (Marketing Information Network) tried various approaches in the pre-Google days, Scott says, but they largely failed to solve the list marketing problem. “They wanted to play nice with all the middlemen. We’re going to cut them out,” he says. “It’s a bold strategy.”
The company has some heavy hitters on its board of advisors, including Clark Kokich, chairman of Seattle-based Razorfish (recently sold to Publicis), startup advisor Janis Machala of UW TechTransfer, and Mike Crill of Atlas Accelerator. Scott says Marketfish is looking to form a partnership with a big company like Google, Microsoft, or Yahoo—none of which has developed a platform to solve this particular online marketing problem (at least not yet).
Scott says Marketfish currently has seven employees, and is looking to hire five more in the next six months or so—everyone from Java software developers to experts in direct marketing and lead-generation marketing. Even while planning to ramp up spending, he notes, “We’re on our path to break-even.”