As this is our first blog post, I thought it fitting to start off by recapping where we’ve come from, where we are today, and where we are headed as a company.
It all started in the early days of May in 2007 when I read a TechCrunch article about the impending launch of Facebook Platform. At the time, Stuzo was building out a social marketplace that enabled users to connect around media (books, DVDs, and CDs) that they loved and wanted to trade. And back then Facebook had, what we now consider a mere 25 million users. I had been an avid Facebook user since the site’s early days, witnessing the tremendous growth of the site while in college, leading up to the realization of the possibilities for engaging consumers through social applications. The prospect of tapping into 25 million consumers led to an instant shift in the direction of our business. On Friday we were building out our social marketplace and on Monday we began building social applications within Facebook.
By July of 2007, we had developed and launched three highly successful social applications: Compliments, My Heritage, and Sports Fan. The three applications had a combined base of over 3 million users. By August, we had an acquisition offer and a term sheet from VCs. We turned down the acquisition offer and decided to take a bridge loan from the VCs that did not turn into an investment. By November, two things were clear to us: 1) we excelled at and enjoyed developing engaging social applications and 2) social applications presented a tremendous opportunity for brand marketers. In that same month, we were introduced to and landed our first client for the development of a branded social application.
2008 was a year of experimentation and development. We started out the first few months of the year by working on both our internal social applications and taking on client projects to pay the bills. There was a struggle within the company as to which route was better: building a product business that developed consumer facing social applications and derived its revenues from advertising dollars or a services company that focused on delivering engaging branded experiences for global brands and agencies. A chance encounter with a Facebook exec at SXSW became the basis of our directional shift.
By late April, we had our answer and began to focus in on developing a platform that enabled rapid development and deployment of promotions on Facebook. In August of 2008, we worked with Facebook to launch the first ever fully integrated program within a Facebook Fan Page for the season premiere of Gossip Girl. The program was a smashing success. We spent the remainder of the year honing in on our process for the rapid delivery of engaging social marketing programs. The company also turned its first profit that year.
In 2009, as social marketing moved further along the line from experimentation to becoming mainstream, we prepared for scalable expansion, and launched several groundbreaking programs that proved a direct correlation between social marketing efforts and hard business objectives. Two of those campaigns were Doritos Guru and TELUS Student. Both programs were part of broad marketing campaigns and, from a technical standpoint, were custom large-scale, cross-platform executions that enabled consumers to engage both on Facebook and on a standalone website leveraging Facebook Connect. The programs were heavily supported by digital, TV, print, in-store and out-of-home media. However, the key success driver was the power of social; more specifically, the social graph and viral features of Facebook, where all of the rich engagement took place within the custom branded social application both on and off of Facebook proper.
I’m going on about these programs, not because we played a key role, but because these campaigns proved that well-executed social marketing programs have a direct impact on the hard business objective of increasing sales. In both cases, the brands experienced the highest increase in category sales in their history. The burden of proving the value in social had been lifted and the programs shaped how we approached clients moving forward as a company.
Delivering exceptional technology solutions time-after-time requires a solid infrastructure and that for us meant continually investing in our services delivery platform. In September of 2009, it had occurred to me that we were growing faster than we could hire technical talent locally. After some research, I decided that we would open a Technology and Innovation Center in Ukraine. Why in the Ukraine you ask? Because the country is a hub for technical talent and we had two people on staff already working from there. However, there was one problem. I did not want us to just outsource; I wanted to open an actual office and instill a culture of excellence. So, in November of 2009, I booked a one-way ticket, packed my bags, and moved to the Ukraine. I ended up living in the Ukraine for four months. We now have a thriving office there with thirteen on staff and a process in place where our US technical team leads spend one month each quarter with our team there.
2010 has been a year of taking stock in our company DNA, accelerating growth, and laying out our directional path for the future. As many rapidly growing firms do, we again entertained VC funding. We were now profitable for two years, cash flow positive, and looking for ways to scale. The funding process made us really dig into who we are and where we wanted to go as a company. We had a few great opportunities on the table with a few great investors; however, it was evident that to get to an exit valuable enough for the investors, we would need to drop the services side of the company and focus solely on productizing our services delivery platform into a social SaaS product offering. Through the process, we realized that we wanted and are best equipped to excel as a social insights and technology solutions delivery company, rather than a pure technology company that focuses on developing social platforms and tools. At the core of our DNA, we have the proven ability of developing engaging campaigns and managed solutions that enable global brands and their agencies to increase the number and value of their customers. Understanding our DNA is what led us to a decision of turning down investors and keeping on a path true to our core competencies and values.
So, here we are today, one of a handful of leaders in the social ecosystem with a clear understanding of our path moving forward as aggregators and integrators of social insights and technologies. It is primarily Buddy Media, Vitrue, Context Optional, Wildfire, Involver, and us who are playing a role in shaping the market. Most of us have to date operated in a vacuum without collaborating with one another. Observing from afar it looks like everyone of the abovementioned companies is moving in the direction of becoming a social technology platform or tools company, with some focused on the fat tail of the market and others more on the long tail of the market, yet trying to swim upstream.
We are going to continue to focus on what we do best and going to partner to leverage best-of-breed social technology platforms and tools to build custom managed solutions that drive consumer engagement and meet the business objectives of our clients. As the industry matures, we see further specialization and strategic partnerships forming. Our core competencies and chosen path puts us in a position to become the preferred industry partner of the platform and tools providers for the delivery of creative, custom technology solutions to their clients utilizing their platforms.
I am excited about the abundant opportunities in social and I am looking forward to seeing social marketing become an ever-growing part of the marketing mix. Additionally, another exciting area that is just starting to take hold is the development of social business practices wherein social becomes ingrained much deeper throughout the entire enterprise. The inherent benefits of core social activities such as communication, collaboration, and sharing are simply too powerful for organizations to ignore.
As I look forward to the future, I see the marketplace continually evolving and Stuzo playing a key role in the ecosystem focused on developing engaging social marketing campaigns and managed technology solutions that meet the targeted business objectives of global brands and their agencies. It is to that end that we are launching this blog so that we can share our insights and thoughts with our ecosystem of friends, partners and clients.
