Surviving The Dotcom Crash And Building A Sustainable Business: LivePerson CEO Rob LoCascio (Part 2)

Sramana: At that point what was your thesis about LivePerson? What vision did you have of the concept?

Rob LoCascio: There was not a thesis. The Internet was just starting. In 1995, I noticed businesses on the Internet, but there were no people. I have always felt that the Internet was a very powerful thing and that without people the Internet was a lonely place.

At that point I started working on Pown. The concept was to build online communities for corporations to bring their customers together. That was the first product line that I came up with. It had chat rooms and bulletin boards. Xerox was launching a website for 3,000 of their customers who buy very high-end industrial printers. We won the contract to build the community portion of that site.

The customers came in and started interacting with each other. The chat rooms quickly turned into a bitching session about Xerox, which made the company decide they did not like their customers talking to each other. They decided to keep one of the chat rooms to allow their customers to ask technical support questions from Xerox staff. That was in late 1997, and it was the genesis of LivePerson.

In early 1998 we decided to break off that part of the technology and productize it as a hosted software platform. Back then SaaS and Cloud Computing did not exist, but that is essentially what we envisioned and what we did.

Sramana: Essentially your idea was to create chat rooms to connect corporate agents with the corporations customers?

Rob LoCascio: Yes. It was unique back then because corporations relied on 1-800 numbers and a limited amount of email. The idea of chat and IM was very unique. We pioneered the use of chat for companies in that fashion.

Sramana: What did you do to validate that idea? Did you approach other customers aside from Xerox?

Rob LoCascio: Yes, we did. We approached several smaller businesses including an ISP out of New Jersey. We also worked with Gunderson which is an HR company and a few different recruiters. We saw results. Our approach of letting them deal with their customers through their website proved very valuable to them.

At that time there were five of us in the company. Half our revenue came from consulting and building websites. We did the chat work on the side until one day in 1998 when we decided as a group to focus on chat. Part of the driving force for that was that our largest consulting customer went away. We knew we had to focus on either the chat product or on becoming nothing but a consulting shop. As a group, we decided to focus on chat.

This segment is part 2 in the series : Surviving The Dotcom Crash And Building A Sustainable Business: LivePerson CEO Rob LoCascio
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