Kent Plunkett is the CEO of Salary.com. His efforts there earned him the Ernst & Young Entrepreneur of the Year award for 2007. He has domain expertise in data on-demand and data syndication, with expertise leveraging this at all levels from the enterprise to the consumer.
SM: Where do you come from? Give us some context about where you grew up and some context that leads us up to Salary.com venture.
KP: I grew up in the Boston area. I was a big fan of Ted Turner, one of the original entrepreneurs of the ’70s. I went down to Georgetown and then to Wall Street for a few years. After that I went to a management consulting firm before going to Harvard Business School. Coming out of Harvard, I became a venture capitalist for a year at St. Paul Venture Capital and decided at the ripe old age of 27 that I was better equipped to be a coach once I had been a player. I felt it was important that I figure out how to run a company before I came back to being a venture capitalist. I spun out into two companies in a row that were funded by St. Paul and I learned how to manage by being the right-hand man for two different CEOs.
There is a great opportunity to develop talent if you are running a business. I committed myself to staying on the operating side. Since 1991 I have done seven startups. Salary.com started in 1999 and has been a nice long run and a very successful and rewarding company because I have been able to develop the team, the talent, and a lot of really neat products.
SM: I applaud your decision to stop being a venture capitalist at age 27 with no real operating experience. I am constantly giving that advice to young people. Can you talk a little bit about the kind of startups you went through?
KP: One of the things I have learned operating businesses is that financial valuations come and go but fundamental operating strength and a strong foundation create sustainable, long-term value.
The predecessor companies that had the most impact on Salary.com were ProCD and InfoSpace. I joined ProCD as the fifty-fifth employee. At ProCD we took the national telephone directory and published it on CD-ROM. In 1995 we were one of the first to put the directory on the Internet. When that company was acquired I went over to InfoSpace and was involved with the founding team. At InfoSpace we also took phone directories and syndicated them across the web.
There are a couple of business model lessons that I picked up from those two companies. One is that content is sticky. You can trade content for eyeballs. If you have interesting content that people want and need, they will visit your site and look at your pages. The second thing is that content is hard to do. It is suited to the on-demand architecture. The cost of maintaining content datasets should be spread out across multiple customers as well as to multiple audiences, everything from enterprise down to the consumers. The third lesson I learned is that if you have an inexpensive offering for consumers or line managers, you can convert those people into true believers in your data and software. When they do have a budget because they have a real business need they will think of you and pay a premium price for your premium products.