Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 4)

Sramana Mitra: What data were you collecting and what was the process of collecting that data?

Rakesh Gupta: Any marketing activity in any company actually falls into three or four different kinds of marketing. One is, people using the phone to reach people. People are using email to reach people or people are doing door-to-door marketing. All people are sending physical direct mail. These are really the large portions of marketing that gets done in a local organization. Then, we added to it things like Google and Internet marketing.

Sramana Mitra: That’s just the parameters.

Rakesh Gupta: To answer your question, what’s important to an end user is a platform to slice and dice the data. But what do they need to slice and dice the data? What they need is the following. They need the kind of business a business is in. That’s very important to them. They need highly granular information on businesses. They need to know how many employees work at that business and what the annual sales is.

The third thing they want to know is who is in charge. Who is the decision maker that they can talk to? The other important thing is if this is a single location business or is its location part of a larger corporation. Local offices may or may not have decision-making power. They want to get to the headquarters as opposed to the local business that they see next to where they are. Knowing that is also very important. Finally, knowing how they can reach that business. What are the different mechanisms? Those are the key elements that a person needs information on.

On the consumer side, it gets a little more complicated. Phone calls are out. Direct mail and email is still in. What they’re looking for is a needle in a haystack. They want to slice and dice by age, income, hobbies, and interests. Those are the kinds of things they want to use because marketing is an expensive activity. The better they can find a needle in a haystack, the better it is for them. To do that, you have to use all these parameters.

Sramana Mitra: This is an area that I know a lot about because I’ve done companies in lead generation. When you were starting out other than InfoUSA itself, what was the competitive landscape like?

Rakesh Gupta: InfoUSA had a presence in that space. Beyond that, there were hardly any original data compilers. Most of the people who were out there were using scraping through the Internet. The quality of the information was bad. There weren’t any serious competitors other than InfoUSA. InfoUSA also was trying to go up-market as opposed to staying focused on the small businesses. We didn’t have much of a competition to be honest on the small business side because it takes a certain mindset to go after small businesses.

Sramana Mitra: Where did you put companies like Data.com and Jigsaw? Were you seeing them in the market?

Rakesh Gupta: Of course. We knew Jim Fowler who started Data.com. Jigsaw had a very different model. It was crowdsourcing. Basically, people uploading business cards that they had collected over their lifetime. There was no sense for how accurate the data was because you can have a business card five years old. As you upload more business cards, you get more points to spend on the site. The quality was a huge issue.

We didn’t believe in that. We believed in having the right information. The cost of making a phone call using bad data is really high for a small business. We knew that businesses are willing to pay a price for high quality information.

This segment is part 4 in the series : Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta
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