Businesses that Work: Respond.com
Interview with Will Clemens
CEO, Co-Founder, Director 

ABC: Can you give us an overview of Respond.com?

Will: The goal of Respond.com is to provide an on-line shopping service that is good for consumers and businesses. What we're creating is a demand driven shopping service that allows for the whole process of buying and selling things to start with what consumers are looking to buy.

This is fundamentally different than the way a lot of transactions have historically begun for consumers. The whole idea of a store or a website full of inventory or, frankly, even an auction site are about putting things up for sale in the hopes that somebody wants to buy them. A different way of doing business, and something that's good for both consumers and businesses, is to have consumers say, "This is what I want to buy. Who can sell it to me?"

It makes things easier for consumers. It's a much more flexible way of shopping because they can ask for their product or service in many different ways. It's good for businesses because businesses now have customers coming to them and saying what they want to buy. Businesses don't try to have to guess on what they're going to sell. They have people telling them what they'll pay for. We think that over time this will become an obvious way of doing business for a really wide range of categories of products and services for both consumers buying from businesses and for small businesses buying from their suppliers, as well. We're first, and the leader. If we keep growing this quickly it will turn into a very large business force.

ABC: When did you first become involved in this business?

Will: I started in December of last year (1998). I actually took the business over from the original founders (which is an interesting story). The family in Michigan, who originally thought of this idea, launched a very small-scale version of this. They realized both for their sanity and privacy that they were better off turning it over to experienced people to grow it into a large company. Just before I started, Bill Gurley from Benchmark Capital, who was then at Hummer Winblad, put seed funding into the business. I started shortly thereafter and started hiring people. We re-launched the site in June of 1999.

ABC: So you took it down in order to reformat the site from its original form of "E-Mail Shopper."

Will: Yes, that was an incredibly valuable experience for us. If you think of the product management process, or the product validation process: as a company you sit in your conference rooms, you draw things on the white board, you get a couple of customers, do some mock-ups, maybe some screen shots. Then you think you've built your business.

Because of the original product we had, we actually had live customers and real data. We had real businesses participating on the service. We had a lot of categories with activity in them. We were able to go through a prototyping phase, or a validation phase that was more robust than I think a lot of companies are able to go through. 

What that means [is that] the service that we launched in July (which was the first time that we started telling people about us) was a reasonably sophisticated product by then. That's not to say that we don't have a lot more work to do to improve it. But, the first time we really started bringing people to our service and signing up merchants in a significant way, we actually had a good product to show them. It wasn't an immature service.

ABC: When you first began your work with the company was your vision the same as it is now, or has it gone through a lot of changes? 

Will: We've pretty much stayed the course. We think the basic idea of providing a service where people can write down what they want to buy, stay anonymous and have us deliver that to businesses as potential customer leads, is a basic concept. It is very powerful, and we haven't deviated from that in any significant way. I'm sure if I stopped and thought about it, I'd remember all sorts of curve balls that we didn't anticipate. The basic business model and the basic services that we provide aren't that different from the prototype that was up and running last year. It's such a sound and simple idea that it doesn't need a lot of elaboration.

ABC: How did you go about putting your management team together?

Will: Most of the team has been hand built through a lot of recruiting. It's what I spend most of my time doing. We've really prioritized [the fact] that everybody in the company is involved with growing the company and hiring more people. We have taken great pains to make sure that every single person that we hire (whether at the junior or senior level) is fully capable of doing their job with a lot of freedom and capable of assuming a lot of accountability for what they do. We have forty decision-makers in this company out of forty people. It's important that we function that way because we need to do too many things.

The senior management team is a fantastic group of people, all of whom have direct experience in previous companies in doing what they're doing now. That's taken a lot of work. There's a big talent shortage in "the valley" ["Silicon Valley"]. It's been a big focus for myself and the board of directors and the existing people in the company to recruit good people…[We have] a team of people that came in here on day one, were up and running and growing their teams the right way. It's been a lot of work. It's probably been at least 75% of my time.

ABC: What is the value of having a Venture Capitalist like Bill Gurley aboard with you?

Will: There are a million things for us to worry about as a company. For whatever good fortune, one of them is not our board of directors or our venture capital backing. Bill has been working with us since day one and has been instrumental in thinking about the business model, in recruiting, and helping us understand what the market really wants. We also have two other Venture Capital firms associated with us who also are bringing tremendous value.

We have John Hummer from Hummer Winblad. His value is that he's been in this business a long time. Everything that we're going through, he's seen repeatedly. He helps us anticipate the growing pains and life cycle problems that a lot of small companies go through because he's participated in it so many times.

We also have the Barksdale Group which is represented in the board with Jim Barksdale. Jim left AOL (although he's still on the board of directors there). His new job is as a Venture Capitalist…His skills in recruiting and in business development is invaluable. The guy has been doing this for a long time. He's got one of the best track records in the industry. To have him sitting on our board, at the same time that he's sitting on boards like AOL and Sun, just brings incredible perspective. So we're really fortunate.

We have a very active board of directors. One of the facts of life for me and for our management team is that we get a lot of input from the board. I think that we all recognize that is one of the most valuable assets that we have. The fact that we can talk to these guys every day is really a benefit. [If I ever] start a company again I'll continue to look for board members who want to be active and want to provide input and guidance for the company. We don't just want the money.

ABC: Respond.com has been called "The reverse eBay." What have you learned from eBay, and what can you do better?

Will: The "reverse eBay" analogy is helpful because it's a very simple way of putting us in the universe. I think there's a key thing that is different than just calling us a "reverse option." There's a human to human element to what we do which is critical. A lot of the benefits of our service are shopping experiences that are focused on things other than just price sensitivity.

"Reverse auction" implies that you're looking for the lowest bid on something that you want to buy. Respond.com allows for something a lot more powerful than that. It allows for you to ask for things in a very flexible way. You're essentially writing down what you want in an e-mail. That information is being sent to a person and a person is reading it and responding to you individually.

That means is that as you shop for things maybe the biggest issue isn't that you're price sensitive. Maybe you're looking for the lightest laptop [computer] you can find; or office furniture for 20 people at a given price point, or in a given configuration; or you're looking for a book on a particular subject but you don't have any authors or titles in mind. It allows for you to talk to people in an efficient way through e-mail. That's a lot more powerful than saying, "Here's the way to get the lowest price on something."

An example of this which helps show why the human-to-human contact is more important than just price shopping is our travel categories. You would think that travel is something that the web is already solved. Shopping for travel can be done through reverse ticket brokers, on-line travel, you can buy your airline tickets from airlines directly, and buy hotel rooms from the hotel chains. But something that's missing there is the service that old-fashioned travel agents used to provide. You'd walk into the travel agents' office. You'd sit down with them. You'd tell them what your travel plans were or what you wanted to do or how much you could spend. They'd show you brochures, they'd make recommendations, they'd help you plan your travel. That's missing from the web because everyone was focused on price or self-service.

We launched some travel categories (almost as an after-thought) with a few small "brick-and-mortar" travel agents participating. They got flooded with requests from people looking for help to make travel plans…We realized that there is a big part of the market that was being under-served. There are people who want to shop on-line, but want to shop with people on-line. They want to communicate with actual travel agents who are willing to give service as opposed to offering the lowest price.

One of the most wonderful things about eBay is that they have developed a community of people who know how to use the service. That's probably the most defensible asset they have. That's something we're striving to achieve, as well. We want to have repeat buyers who know the most effective way to write down a request and get good responses. We want to have sellers that know how to help buyers in this model. We need sellers that understand that personal attention, giving a good helpful response and helping people solve their problems is the best way to meet customers.

What eBay has done a great job of is the behavioral or community aspect to their service. They've created a place where everybody knows how to participate on eBay... We feel that the existence of eBay is a good thing for us. By creating this forum, they've created a lot of small businesses of people who are willing to give good customer service to make sales. A lot of people who sell stuff on eBay also sell stuff on Respond.com…eBay is the place where they go to put things up for sale that they know there are buyers for. Respond.com is a way for them to meet customers. It's walk-in business. People ask for things that the seller didn't know there was a demand for.

ABC: What has been your high point with Respond.com?

Will: Getting the site up was a high point! Every time we hired one of our team managers was a high point. That's always been a tremendous shot in the arm…The last big thing that's happened is that we hit 20,000 sellers participating on the service. That's a milestone that, even a few months ago, seemed pretty daunting.

ABC: What has been your low point?

Will: …To answer that differently would be to ask, "What do I worry about?" I worry about is continuing to grow the team the right way and quickly.

ABC: When will you consider the company to be out of its Beta Test?

Will: In the fourth quarter. There are some things that we'll need to put together to make that happen, but we're sure it will.