Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
Today's interview is with Kevin Lee.
Kevin is the founder and CEO of WeCare, a service that allows online shoppers to donate a percentage of their online shopping at no cost to them to a nonprofit school or association.
It's partnered with over two and a half thousand merchants from Travelocity to Sears, 1-800-Flowers and Apple.
And to date, WeCare has raised over $6.7 million.
Kevin is also the co founder and CEO of DIT, an award winning full service online advertising and marketing services agency that has been in business for almost 20 years.
Kevin, welcome to the show.
Kevin Lee (01:06.400)
Thanks for having me, Omer.
And actually, I guess our bios are out of date because we're at about 7.8 million raised for nonprofits so far on We Care.
So please report the higher number.
Omer (01:18.000)
That's awesome.
So now before we talk about We Care about, tell our audience a little bit about yourself.
Who is Kevin when he's not working?
Kevin Lee (01:27.340)
Well, with two different companies, I do spend a majority of my time working, but certainly family life is really important.
I've got a six year old and an eight year old, so I spend a fair amount of time with them.
I'm in charge of bookending the day, so I do breakfast and I do just before bedtime, so there's that.
And the family as a whole really enjoys beaches.
So we have a beach house on Fire island in New York, which is one of the oceanfront communities.
So we've got a house there.
It's closer to Manhattan than the Hamptons are, but it's essentially the same beach.
And then, you know, we tend to take beach type vacations, so we spend a fair amount of time doing that as well.
Omer (02:11.500)
Awesome.
Now we like to kick things off with a success quote to better understand what drives and motivates our guests.
What is one of your favorite quotes?
Kevin Lee (02:22.530)
You know, I guess I'm not sure if it's attributable to anyone else in particular, but I find that in most business relationships it's really about and sometimes in the business plan itself, it's about trying to determine if you can find sort of win win scenarios for all the various partners.
So that could just be two group partnership where it's just win win, or it could be a triangular partnership where there's a win, win, win or they could even get get more complicated as you start to add more brands or business entities into the mix.
And, you know, if one always comes at it from this sort of trying to architect the win win perspective, it forces one into the other person's shoes when thinking about how one might do business together or how a business might run.
And I think it's helped me come up with a variety of business ideas over the trying to think about, you know, how do we make everybody happier?
At the end of the day,
Omer (03:26.770)
that's a great philosophy and a great attitude to have in business.
Now, you established or launched DIT back in the 90s.
Can you tell me a little bit about that?
Why did you get into that business?
Kevin Lee (03:42.650)
Sure.
Well, DIT's business has transformed several times in the 19 years that we've been doing it.
So in the beginning, there was actually a need for search engine submission.
So we came up with sort of just in some brainstorming, my business partner, I and one former partner came up with this idea that you could do better than the submitted service, which was a search engine submission service, by actually monitoring the status of a particular URL in the search engines and automatically resubmitting anytime that the submission didn't seem to stick.
And so since the original service that we were trying to improve upon was called Submit it, we came up with DIT as sort of the next iteration of submission.
And that business took off pretty quickly.
And from there people asked us to get into organic SEO.
And from then, we were one of the first groups to buy paid search clicks from goto.com which was the predecessor to Overture, which became Yahoo Search platform.
And as you know, the industry's continued to evolve around that.
So, yeah, it's been around a long time.
And you know, now we're still very search centric in our business, but we've, you know, we're a full service digital shop at this point.
Omer (05:06.960)
Okay, so let's talk.
Before we get into the more details of WeCare, can you tell our audience just a little bit more about that business?
Who are your target customers there and what's the problem you're trying to solve?
Kevin Lee (05:24.240)
Well, really the problem is one of social good.
We see nonprofits as having an increasingly difficult time meeting their goals and objectives due to fiscal constraints and also due to marketing constraints.
We sort of thought, hey, wouldn't it be great to figure out how to build a business that could do well and do good at the same time with cause marketing at the center, with the concept of cause marketing being that there's some kind of a cause, typically a nonprofit cause that is aligned with a for profit business in many cases.
And you see things like co branded boxes of things in the grocery store that are the more traditional forms of cause marketing.
But we looked at it from the perspective of let's empower the consumer and make it consumer centric.
So you and I, what we do every day and everyone listening is worth money to marketers.
If I could figure out how to capture that value and harness it and charge marketers for that value that we all represent as individuals and as business owners, that would be a really cool way to give back to charity.
If we could just split that money that we could harvest and harness from individuals, online shopping and online searching and eventually even more sophisticated changes in perception and attitudes.
But that was the genesis behind the we care idea.
The original technology that we invented never took off, but that was the original genesis.
So as with many software startups, you don't always end up where you started.
Omer (07:15.790)
Let's talk a little bit about that.
What happened with the technology?
Kevin Lee (07:19.550)
So my initial thinking was that it would be great to do this at an organizational level.
So I invented an idea and then had coders code a partially transparent proxy server that would allow a college or university or a company or a hospital to basically monetize all the traffic inside its LAN by just using our upstream DNS instead of their existing DNS.
And then we would tunnel any monetizable traffic through this partially transparent proxy server.
And I went and have a patent pending on it and everything.
And so we built this.
We actually spent probably about $160,000 building a prototype of this.
And I thought, well this should be a no brainer.
I should be able to go to any university and say, hey look, your students are buying books online, they're buying all sorts of other stuff online.
It's a highly digitally savvy audience.
So they're going to over index on online purchases and all you have to do is turn it on.
It's super easy.
You just have to, you know, either use a copy of our DNS or on site or just change your upstream DNS to ours.
And I could never get anybody to do it, even though it was free, because IT teams at universities, you know, lock down universities, super tight and they just didn't want to have to deal with anything for a mere half a million dollars a year worth of incremental revenue because that was just insignificant.
So you know, we went ahead and built the whole thing thinking somebody would want it and then we tried it at universities, we tried it at hospitals, which would want to implement it.
And on the company side, there was always some kind of an issue.
Either human resources didn't want people shopping at work or the IT team didn't want to make the change.
So it was sort of a brilliant technology that went absolutely nowhere.
Omer (09:19.020)
Okay, so you spent about $160,000.
How long did it take you to build this piece of technology?
Kevin Lee (09:28.300)
So it was probably about a 6 month period of time.
Luckily I was still running DIT at the time, so that was paying the rent.
As we got started, it was really just sort of a side venture that we were working on.
My business partner and I, along with some tech people.
Omer (09:49.570)
And did you use DIT to fund the development of this project?
Kevin Lee (09:55.970)
Not directly.
I mean, like I said, it was just the fact that I was able to be paying allowed us to have the resources to be able to invest in this.
So it was sort of like in other cases you'll hear of entrepreneurs or startup folks, you know, keeping their full time jobs while they try to bootstrap something on the side.
You know, I guess it could be looked at somewhat similar to that, but the difference was that, you know, I actually had hired somebody to be the general manager of IT so that I could concentrate on making sure that it stayed on track.
Omer (10:33.580)
Okay, so you spent six months building this thing, put $160,000 in, and then you suddenly realize that nobody wants it.
What was the most important lesson that you learned from that experience?
Kevin Lee (10:49.120)
I guess it was talk to a lot of people early on in pre development and don't worry about somebody.
Sort of the cat getting out of the bag and you losing your first move or advantage.
Which is what I thought.
I thought I really didn't want to tell anybody about it because I just thought it would be be so cool that it would be and it would take off.
So I didn't want anyone else to learn about it and clone it or build it, even though I had a patent application.
So for future things that I built, I've been much more willing to discuss with potential users and discuss with potential buyers.
Hey, what do you think of this?
Is there anything I forgot?
Is there anything missing?
Would you do this?
Would you buy it?
Would you use it in your day to day, that kind of thing?
Getting the feedback of the folks in the ecosystem has been something really valuable and it was missing to a great extent there.
Just because I made the assumption that there wouldn't be any impediment to implementation
Omer (12:04.740)
what advice would you give to somebody listening to this?
Who, who says, yeah, I understand that, and rationally I get that I should be going out there and talking to people and getting feedback, but I really believe that what I have is this killer idea and I just don't want somebody else to kind of beat me to it.
Kevin Lee (12:31.270)
Yeah, I mean, there's always risk, right?
So you have to look at the risk reward ratio for the fact that you may get some other really cool epiphanies while talking to potential customers or potential users, versus really being so sure that you got it absolutely right just in your initial product spec, in your initial product roadmap, where you really don't feel like there'd be any incremental value from engaging with your constituents in one way or another.
I've just found, after having built a lot of different things, that the original product roadmap ends up not looking that much like what I end up with nearly every time.
And either that means that I was stupid the first time and didn't really get the idea right, or maybe it's just the fact that, you know, it's impossible to do that and you really do need the wisdom of crowds to help you refine an idea in order to get closer to what people will want and what will solve their problems.
Omer (13:39.650)
Okay, so this first idea, it failed.
A lot of people would probably have given up at that point and moved on to something else.
But you didn't do that.
So what did you do next?
Kevin Lee (13:51.330)
So I did shelve the original technology for a little while, and I knew how expensive it was to market directly to consumers, so I wanted to avoid that initially.
And it wasn't until I learned about the various places that one could do piggyback installs of programs that we've discovered sort of another potential marketing vehicle.
So download.com for example, and other places will offer an additional piece of software when you install one.
And it's pretty common, for example, for the search toolbar businesses even to partner with major software vendors in order to facilitate trial of their search toolbars.
We weren't a search toolbar, but we just learned about the fact that because there are situations where there already is a search toolbar on the machine, that a lot of these partnerships basically said, well, I'm not going to put a second search toolbar on the machine.
We'll offer something else up as an alternative.
And, you know, we Care's app could have been that alternative.
And so we rewrote the functionality that had initially been remote in A proxy server.
We wrote it into something that could be a browser plugin.
And that was sort of, you know, what was the catalyst for us sort of reemerging the We Care idea, but doing it at the individual consumer level instead of at the organization or LAN level.
Omer (15:26.590)
So how did the browser plugin work?
So why would somebody install this, and what would it do once it was installed on their computer?
Kevin Lee (15:35.390)
Yeah, it does the same thing.
It does now.
Omer (15:37.790)
If anybody wants to participate and to give through We Care, they have to have a plugin installed.
Kevin Lee (15:46.510)
They don't absolutely have to.
I mean, we have the webmaul, and people do absolutely do that as well.
We just find that with 3,000 different merchants in all these different industry categories, everything from domain registration and hosting to apparel and tax preparation, that it's impossible for people to remember which merchant partners are in our network and which ones aren't.
So our reminder application reminds them as they're surfing around, hey, this one's part of the program.
So when you see that alert, you know, you should prefer that merchant.
When you see that alert, that alert come up.
And if you don't see the alert come up, the reminder alert, then, you know, participating merchant.
And maybe you should keep shopping around, because if you can find the same price for a merchant that's willing to give a percentage back, that's better for your nonprofit cause.
Omer (16:42.820)
Okay, so you changed the approach on the technology and moved away from this DNS server to this plugin.
What was the first big breakthrough for you?
Kevin Lee (16:59.070)
It's been a lot of little breakthroughs.
So finding some marketing partners who are willing to work with us to allow us to be a replacement when the person already had a search toolbar on their machine was great, because some of the people in the industry said, wow, we just think this is a really cool idea.
We'll try to work with you on marketing costs to see if we can come in at a number that works for you.
That was really key.
And then just along the way, we just had lots of sort of small technological improvements and epiphanies in making the user experience better and making things clearer for consumers along the way.
Omer (17:44.810)
How did you market this service?
Were you pretty much relying on the merchants to do that for you, or were you guys having to go and sort of figure a lot of that out as well?
Kevin Lee (17:55.720)
We would do a lot of that ourselves through alliances with software publishers, either directly or indirectly.
We also had a lot of the nonprofit causes.
Once we were able to reach critical mass and demonstrate the fact that micro donations do actually add up.
And they are a great way to keep your brand in front of the consumer or supporter.
Once, once that we reached critical mass and the nonprofits saw the opportunity, they would actually often, you know, I wouldn't say they would market for us per se, but they would certainly, you know, have download links on their sites or refer people to our site so that they could check out our.
Either our web mall or check out our browser plugins.
Omer (18:45.870)
So looking back at the last few years, what has been one of the hardest things about building this particular business?
Kevin Lee (18:55.690)
Probably the hardest thing has been the fact that one of our marketing channels, which was the piggyback install on top of another piece of software, where we had this relationship with the software publisher, that industry has devolved somewhat.
So we've had to come up with alternative marketing channels that allow us for a more direct relationship with consumers.
One of them just launched last Tuesday, actually, and it's called Sweeps for a Cause.
Sweeps the number four and then a cause.
And the idea there is that it's a sweepstakes, and it introduces people to our platform and to our browser plugins in the process of allowing them to enter a sweepstakes.
And there's a $10,000 prize goes to the winner, and $10,000 goes to their selected nonprofit cause.
So it's a philanthropic kind of a sweepstakes.
And so we have to come up with new marketing ideas like that on a regular basis just to sort of stay nimble and keep ourselves growing.
Omer (20:06.670)
Now, from doing research for this interview, I learned that.
Did you get even sort of deeper into the hole with WeCare before you guys started getting some traction?
Kevin Lee (20:22.520)
Oh, sure.
I mean, we had, like I said, spent the first 150,000, 160,000 prototyping the original technology.
And then when we had the idea to do it at the browser plugin level, I had to go ahead and, you know, pay coders to code browser plugins for the three top browsers, you know, ie, Chrome, and Firefox.
And, you know, while we could have one done potentially before the others, we really wanted to make sure that before we really did a launch push that we had the opportunity for people to select whichever of the three they wanted.
So we had to go ahead and.
And spend a considerable amount of money architecting the new platform.
And then we have to figure out how to get it to work from a marketing perspective.
And members who become We Care members, they generate revenue over time.
Unless it happens to be the week before Cyber Monday, there's not going to be A tremendous amount of concentration in shopping in comparison.
So it takes a while for a member to generate the five or ten dollars for their nonprofit cause a year that their value represents.
And yet our marketing costs when we're doing the marketing happen right away.
So we had to sort of advance cash into the business pretty significantly even once we got the technology working.
Omer (22:01.030)
So let's talk a little bit about the business as it is today.
So you've said that you've raised over $7.8 million to date.
How much of that money do you keep and how much of that ends up going to the organization?
Kevin Lee (22:17.830)
When we don't do any marketing at all, which is a big chunk of our business.
And because people come in over the transom or get referred by a friend or referred by a cause, we just put the money that we get, 50, 50, if we, in certain cases with certain causes, we negotiate that we'll do marketing on their behalf and then we're able to sort of take our marketing cost out of the equation before we do the revenue split just because otherwise we wouldn't have enough money to operate.
But generally our mission is to try to keep our marketing costs as low as possible or have as much of it be earned media as possible so that we can do the 5050 split.
Omer (23:01.630)
And how many people do you have working on the We Care business?
Kevin Lee (23:05.310)
There are 14.
Omer (23:06.750)
Is there one particular thing in your business that you're most excited about right now?
I know you talked about the sweeps for a cause and I'll include a link to that in the show notes, but you know, is that the one thing that's kind of focused taking up your time at the moment?
Kevin Lee (23:23.150)
Yeah, I mean for the time that I do spend on that business, again, it's got a team and a general manager and it's quite self sufficient.
But from a strategy and product roadmap perspective, I'm still involved there for 10 or 15 hours a week, much of it on the weekends.
I am actually pretty excited about the sweeps for a cost platform because we discovered the fact that that platform could be sort of given away to other marketers as a conversion enhancer because we have the rules written in such a way that I can give floaters or widgets or light boxes or subscription boxes to other marketers that say instead of just subscribe to our newsletter, now it says subscribe to our newsletter and enter for a chance to win $10,000.
And of course the conversion rate goes up and I can empower other marketers to use it.
And it's powered by suites for a cause.
So that allows them to get a higher yield of newsletter registrations from their current visitors than they would otherwise get.
So that's really exciting because almost every marketer that I talk to is interested in capturing email addresses of visitors to their site.
So it doesn't matter if they're a for profit marketer or nonprofit marketer.
B2B, a publisher, you know, between the CRM touch point of an email address or a social CRM, which could also be stimulated via sweepstakes incentives.
Those are two really important ways that marketers can continue to communicate with their customers and prospects.
So because this is essentially a catalyst that increases that efficiency, we see it having some pretty broad applications.
It's only live since last Tuesday, so we haven't really had a chance to do really good split testing of here's what we had before and here's what we have now.
But once we have that data, I think a lot of marketers will say, hey, let me use that platform.
That sounds like it'll be really useful.
Omer (25:38.010)
Now, earlier we mentioned that you've partnered with over two and a half thousand merchants.
How did you go about doing that?
Did you have to, how did you market to those people?
How did you reach out to them?
Were you using search marketing?
What was the vehicle for getting to those people?
Kevin Lee (26:02.550)
Similarly to the three other three or four other major players that monetize people's online shopping, it's done through affiliate networks.
So the affiliate networks such as Link Share, Commission Junction and Pepper Jam, which is now part of ebay, they have existing relationships with the merchants already.
So they become our conduit to have the conversation with the merchant to see if the merchant has an interest in participating with the program.
So it adds a layer of efficiency.
We can also integrate merchants into our platform directly, but we don't really have a big enough biz dev team to proactively approach merchants about that unless they're particularly large and don't have an affiliate program in place.
So we're open to doing that.
But my biz dev team is sort of typically busy with other projects.
Omer (27:01.800)
What advice would you give to somebody who's maybe in a similar situation is trying to maybe get these kind of deals struck with other companies and maybe isn't having a lot of luck or getting the kind of the scale they want to get?
From your experience, what, what advice would you give somebody like that?
Kevin Lee (27:22.190)
Well, I mean, I think it's always useful to try to apply the power rule or the 8020 Pareto rule to your prospects of various sizes or profitabilities and just really try to identify where are the likely ones that could really move your business forward.
Because it's very easy to get distracted with a very large list of of people to talk to.
A very large list of opportunities.
Whether you do it on a whiteboard or in a spreadsheet or Google Doc or whatever, always sort of rejiggering where you think the lowest hanging fruit is from an ease of doing a deal versus how material that deal could be.
So balancing those two things against each other, I think could be really, really useful because there may be some deals where because you have a personal relationship, you can get the deal done much more easily.
And sometimes that's really great from the perspective of having a case study, but it might not be that material to your business.
And on the converse side, you could go decide you want to spend all your time whale hunting and go after those half a dozen whales that could.
Any one of them could feed your company for two years.
But you have to catch.
All right.
So finding that balance is really key.
Omer (28:47.190)
All right, that was part one of the interview with Kevin Lee of Wecare.com that's we-care.com in part two, we'll talk about search engine marketing.
Kevin is an SEM veteran and has been in that business for almost 20 years.
So in the next episode, Kevin will share some lessons to help software entrepreneurs be more successful with search engine marketing.
