An Interview With Kevin Gao, President And Chief Executive Officer At Comm100
Why We Started Comm100?
When I was managing Dynamsoft, the service we used for each customer communication channel (ticket, email, forum, knowledge base…) was from different service providers and totally independent from each other. It was difficult for the staff to consolidate the customer information and coordinate with each other. The quality and efficiency of customer communication was also affected. I saw the need and benefits of an on-demand customer communication solution that integrates whatever channels we want, but there was not such a solution in the market. That’s when the idea came up. With the idea in my mind, I did some market research and found that:
- It was a rising industry with 50%+ yearly growth. To most small and medium businesses (there were really a lot) who couldn’t afford to host and manage a complicated IT solution on their own, ready-to-use SaaS solutions would be ideal. Similar service providers such as LivePerson and Constant Contact had an over 50% yearly revenue growth.
- There were lots of players, but most of them focused on 1 or 2 specialized areas only.
- Low entry barrier, which we would raise with our offer.
- No clear choice brand. We aimed to build the No. 1 brand.
- High Switch cost. SaaS model has higher customer retention rate and the more integrated the solution is, the more difficult for customers to make a switch.
After the market analysis, I was further convinced that it was a highly potential market. Thus I started Comm100 in 2009 with the goal to make customer communication simple and effective, literally, for any business or organization.
Comm100 Product Concept
The key advantage of Comm100 products: seamless integration of multiple communication channels with pluggable modules. Our six products(live chat, email marketing, help desk, ticket, knowledge base, forum) can be either fully integrated to provide a complete customer communication solution or used independently to satisfy different business needs. Each product can be easily integrated with another. Users can choose among the products based on their own business needs. As our tagline “100% communication, 100% success” indicates, Comm100 is committed to helping businesses make greater success through effective customer communication. Currently we have six products, but that’s not the end. In our big plan, our ultimate solution should include all major customer communication channels, including phone call, SMS, SNS, etc. as well.
We had a great business model when starting Comm100. Most of our products were delivered in the SaaS model while a few were open source. With small and medium sized businesses as our main target audience, our overall strategy was building a large customer base by offering better but free customer service software and then charge small fees from a large number of customers for premium services. We offered products and services totally for free for about two and a half years and achieved an unprecedentedly rapid growth. Yet we need money to sustain the business. We tried to raise capital from external investors, but with no luck. We believed that our business was worth more than what they could offer. We decided to rely on ourselves. So on the Christmas day of 2011, we entered the fee charging model. From then on, we have been offering SaaS solutions for a reasonable recurring fee.
One of the biggest challenges we have experienced at Comm100 is monetization. Every business is for profit. We started with free products and promised our customers that all the products or services they had got for free would continue to be free in the future. After two and a half years, we did attract a large customer base with the free strategy, but most of the customers were small or micro businesses that had very limited purchasing power. To attract more high-end customers, we had to increase our investment in product development, marketing and sales. Yet without capital support, that was not easy. So finally, we made a hard decision: starting charging for our products. With some income, we could have more resources to put into production so as to achieve a better growth for our company.
The shift from free to paid products was not easy, either. We need to take old customers’ expectation into consideration. As we promised, all the products, features or services they had got for free would continue to be free for them. They only need to pay when they want to add a new product, a new feature or an additional operator. And to thank for their support along the way, we offered them at least 20% off discounts if they ever need to make any purchase. Most customers were OK with this change while a very few were a little bit disappointed. We explained our situation with them, gave them special offers and earned their understanding and continued support.
After we started charging, the key topic in our company became how to increase sales. We have done a lot to achieve our sales goals, including optimizing product experience, adjusting pricing plans, streamlining the purchase process, recruiting/training sales specialists and many more. In the first months, the sales growth was slow. We knew we had to make some change. Generally speaking, customers have much higher expectations for a paid product than for a free product. To attract and keep paying customers, we have to be more professional in every aspect of our business. And to do that, we need to be more focused. So in the middle of 2012, we made a big change to our product strategy. Instead of working on six products in the same time, we decided to focus all our resources on one product first: Comm100 Live Chat.
As you know, making and promoting a full solution is much more complicated than doing a single product. We need to break through from a certain point first. And as we expected, our sales revenue has been growing steadily since the change was made. That doesn’t mean we forget what we founded Comm100 for. It’s just the right thing to do at the current stage. We will work on more products in the solution when resources allow. Our dream never changes.
Suggestions for Other Entrepreneurs
Focus. We wanted to start big. Global market, multiple languages, multiple products, supporting all kinds of platforms and mobile phones… Great strategy, but as a startup with limited resources, you cannot do them all; you have to choose a breakthrough point, focus all your resources on it and stick with it. Life is all about choices, so is business. We once made mistakes, but fortunately, we managed to get back to the right track quickly. After streamlining our business several times, we now focus on Comm100 Live Chat only. And each time we made a “focus” action, we saw positive results.
Change. The customer is changing; the competitor is changing; the Google algorithm is changing; the market is changing every day. We have to make adjustments as fast as possible to echo to the changes. One of the biggest changes happened at Comm100 when we started charging for our products. Customers’ expectations on free products and paid products are different. The whole operation process is different. It had a great impact on all parts of our company. Yet thanks to our young and innovative team, we got to our feet pretty fast and walk steadily from then on.
- Provider of customer service and communication solutions.
- Incorporated on July 3rd, 2009, in Canada.
- CEO and Founder: Kevin Gao
- All products are delivered in the SaaS model and fully hosted by us.
- 200,000+ registered business clients around the globe.
- Clients include HP, GoodWill, Sunoco, Rogers, IEEE, Aviva, etc.
- All products and services were offered totally for free until the Christmas of 2011.
Kevin Gao, President And Chief Executive Officer :
Over 15 years’ hands-on experience in the IT industry and about 10 years’ experiences as an entrepreneur:
- 2009 till now: CEO of Comm100, working actively on product development, marketing and sales.
- 2009: Founded Comm100.
- 2004 -2009: CEO and System Architect of Dynamsoft Corporation.
- 2004: Founded Dynamsoft Corporation, which provides version control solutions and TWAIN SDKs.
- 2006 -2012: MBA in Marketing, University of British Columbia, Canada.
- 1994 -1997: Master in Computer Science, Zhejiang University, China.