Long Journey Over 20 Years: Paula Tompkins, CEO of ChannelNet (Part 3)

Sramana Mitra: What year is that?

Paula Tompkins: 1985.

Sramana Mitra: Tell us a bit about the idea and how you came up with it.

Paula Tompkins: As I mentioned, the idea was that personal computers were gaining popularity. In 1985, there were about 10 million personal computers. There was the Macintosh, which had just emerged on the market, and then there was the IBM PC. Most of the IBM PCs were used in the business environment and about 50% of IBM PCs had a color card that would allow the computer to display four colors.

I went to Ford Motor, General Motors, and Chase Manhattan Bank. I convinced them that they could educate and inform their customer through the use of software. These are original digital marketing campaigns back in 1985. We did focus groups to validate the idea. Sure enough, the consumers were extraordinarily enthusiastic and were very interested in getting information on consumer purchases that they could look at on their personal computer in their home or office.

That was the genesis of the idea and the validation of the idea. Then I had a contract with BMW. The second client was General Motors and the third client was Chase. I convinced them that we should actually build out these software programs and distribute them to their customers. Then I worked with people in the Bay Area that were on the bleeding edge of these kinds of activities. I pulled them together and built out the world’s first interactive digital marketing program.

Sramana Mitra: Let me probe a bit. When you decided to start this company in 1985, did you bootstrap the company? Did you raise financing?

Paula Tompkins: I bootstrapped it. The company has never taken any external financing. It has always been grown via its own profits. It’s pure bootstrap. I still own a significant part of the company – 85%. My key employees have some skin in the game.

Sramana Mitra: How did you validate? What was the process of validating that what you have to offer is something that customers would want?

Paula Tompkins: Focus groups. We were actually working with our clients and they would contract with a professional group. We pulled consumers in from the San Francisco Bay Area, New York, and Chicago. The requirements were that they had to have a personal computer in their home. We actually brought those people into focus groups and taped those focus groups.

Consumers were extremely enthusiastic about using their personal computer in this way. We actually ended up advertising in PC publications where PC users in those days would read about their computers. They were very enthusiastic and were early adopters. One of the critical things for companies like General Motors and Ford was that their audience was dying. People who bought automobiles were older.

The younger more affluent consumers that the General Motors and Ford people would love to have attracted would not even consider a General Motors. They’re buying Hondas, Toyotas, Nissans, and BMWs. It was the play to reach a very desirable, up and coming audience and change their mind about General Motors or Ford as a company and get them to come back in the showrooms and buy their vehicles. It was a resounding success. It only took us about two years to hit the million dollar mark.

Once we had the success, there was a tremendous amount of press on it. We ended up working with many corporations. We’ve outlived many of our clients. The likes of MCI was a significant client for us. Digital Equipment Corporation was also a client.

This segment is part 3 in the series : Long Journey Over 20 Years: Paula Tompkins, CEO of ChannelNet
1 2 3 4 5 6