Monday Oct 7, 2013 by Dennis Keohane - Staff Writer, VentureFizz
Randy Parker has made a career of helping VSBs, an acronym for 'very small businesses.' Actually, after talking to Parker for a little bit, you realize that helping the little guy is Parker's life passion.
Parker, who was a founder of Constant Contact, has had a very interesting career. One that almost plays out like a bit like the "History of the Boston Tech Industry." From AI at MIT, through a couple of tech bubbles, to starting his own successful company, to his latest project, PagePart, Parker has seen so much, that sitting down to talk with him is a truly enlightening experience.
I was lucky enough to talk with Randy Parker for a while recently. Here is what I learned:
What Brought Parker to MIT?
"I was a geek since twelve," he said. "I’ve had one job my entire life, and that’s working on software products."
"I got really hooked with Artificial Intelligence, and that was how I came up to MIT," Parker added. "I wanted to go to the place where I could bathe in AI. I went to the AI Lab (a precursor to the Media Lab), which allowed me this opportunity to dive right into the research."
Parker admits that he was in awe of the fact that at MIT he could be working side by side with a researcher whom he had written a thesis about a few months earlier.
Parker on the "First" Tech Bubble
"There was a first tech bubble," Parker explained, "this AI bubble, which was a precursor of everything we saw in the late 90’s."
"There were absolutely outrageous valuations and people throwing money around everywhere. A week after graduation, I got told that I get $2000 to furnish my office, when I couldn't even furnish my apartment at that time. We also had these 'hundreds of dollars' workstations on our desks."
"However," he added, "the hardware we were playing with was just amazing. It was all a precursor to what is here today. We had UI’s that looked like iOS7, we had the software that could automatically figure out if you had a meeting."
"[Everything that is new today] was all foreshadowed."
Parker explained what happened next, "We quickly realized that throwing money at problems doesn’t get you anything."
"We had a dream and had the best people in the industry. But, we had no focus and we had no one doing customer development, no one trying to figure out what jobs a customer wants solved."
Very quickly, the money being funneled into the AI industry dried up. "AI was the first 'zero-billion-dollar industry,' everybody had the lofty projections and then, boom."
As Parker added, "When the web bubble came around in the late-nineties, it was all familiar, we had gone through that already."
The Early Days of Mobile
Among many of the projects Parker worked on at MIT and at some early startups were a few early-stage mobile devices.
"We did mobile back then, and it was interesting," he said. "We built a tablet around 1988 or '89, but it weighed 10 lbs. and cost $5000." "So," he added, " it was just off by about 10x on the two key metrics."
Looking back at the mobile experience, a lot can be learned in Parker's eyes. "It just shows that at some point, VC’s take a bet that either produces something grand in the moment, or else, it comes back around in its second iteration."
This period was vital to Parker's later work as the dealings with small startup companies led him to get to know small business better.
How a Passion for Small Business Led to Constant Contact
"I grew up as a third generation entrepreneur." Parker said. "That’s all I knew, people who worked for themselves or worked for small companies."
It took a couple of tries, but finally I realized that we’ve got to be between the small business and their customer," he explained.
"That was the start of Constant Contact. We tried to figure out how to use the power of the internet to connect a small business that doesn’t have a lot of time and doesn’t have a lot of knowhow."
"Who needs the power and leverage of the web more than these guys," Parker remembers thinking, "they are struggling to make ends meet and spending a lot on marketing."
So Constant Contact made it easier for small businesses to conduct email marketing campaigns, cheaply.
But it wasn't easy at first. "You had to coach a lot of these small businesses," Parker explained. "The thing with the small business is that it takes you a while to really get traction."
The reaction Constant Contact was getting that made them realize they were on to something.
"It wasn’t so much a growth number, we were always woefully behind our projections," Parker said. "The key was seeing [customers who had done campaigns] come back to us, being grateful, telling us we made them look great."
It was then that Constant Contact realized that it could, "walk someone into being way better than the marketing they are doing on their own," and the company exploded.
The Challenge of Being First
It wasn't easy to get funding, of course. But Parker's experiences typify how difficult it can be for innovation and investment to get on the same page.
His story about the early days of Constant Contact is priceless.
"SaaS hadn't really been proven," he said, which made things more challenging because they were trying to do something that didn't exist.
"I had an investor," Parker explained, "who came to me years later when Constant Contact was growing and said, ‘Why didn’t you pitch us this thing?' and I told him, 'That’s the plan I pitched you'. 'Well, you didn’t call it SaaS,' the investor responded."
"Well, nobody called it SaaS," Parker said. "The term didn’t exist back then. But here is the site you went to, you type in this info, we hosted the site and ran the whole thing, and it sent all your emails for you."
As he told the investor, "THAT is SOFTWARE running as a SERVICE."
Parker Moves On
Always the small business guy, Constant Contact became too big for Parker.
"I’m a small company guy," he said. "I’ve only worked once for a company with over a hundred people, and that was when I did a co-op with Digital."
Parker explained, "So it got to a point where it made sense for me to move on."
After Constant Contact, he tried another startup, which didn't work out. Then Parker did some consulting work for Intuit. However, he knew he could still do more for small businesses.
"Over the past few years, I’ve really been emphasizing the term VSB, 'Very Small Businesses'," Parker told me.
As he explained it, a VSB is the type of company that doesn't have enough money for marketing, not a Subway franchisee or other company that could fit under the "small business" umbrella.
There is a major plus/minus of working in the extremely small business space. "The bad news about VSBs is that they are really hard to tackle," Parker said, "but the good news is that they are everywhere."
The biggest problem today, is that a lot of small businesses have, as Parker described, "crappy websites." Even with the wide-scale availability of easy-to-use website building tools, VSBs are still neglecting what is in today's web-based world an essential part of business.
As Parker explained, "It’s too tough for small businesses to do themselves and too costly to get someone else to do it for them."
"So what’s the in-between?" he asked.
PagePart. His new company does what Constant Contact did for email marketing for small business website development, by, as Parker said, "leading them to the solution."
"We want to find the next 10 million businesses that are not plugged into digital marketing today, and get them into the grid," he said of PagePart's lofty goals.
PagePart has two components to help VSBs build better websites. First, as Parker explained, "Automate where you can automate to generate a great web and mobile site." Second, PagePart offers advise for a company's online impact with industry specific guidance for website design, email marketing, and social media management.
Currently, PagePart has a few hundred companies testing the product, and they are adding more every day.
If VSBs find the same value in PagePart as they did with Parker's former "passion project" to help small businesses, the former Constant Contact leader may find himself in another situation where his company is getting too big for him.