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Russ: This is the BusinessMakers Show heard here and online at theBusinessMakers.com and it's guest time on the show and I'm in Austin, Texas at the headquarters of nFusion and my guest is John Ellett, cofounder and CEO. John, welcome to The BusinessMakers Show.
John: It's great to be here, Russ, thank you.
Russ: Well let's start by you telling us about nFusion.
John: Well, nFusion is a unique kind of a marketing services firm. We've pulled together three distinctly different types of firms together in one place; a marketing consultancy, an advertising agency and an interactive firm and that allows us to both strategically plan and then execute marketing programs that build demand for a company's products or services; help build their brand across the full spectrum of marketing options. Increasingly, those are digital options.
Russ: Okay. Those three diverse categories, do you have talent here that overlaps in multiple areas or are they distinctly divided?
John: Well, we describe our team as a team of specialists who work together, collaboratively, to develop these integrated programs and so we have some folks that are multidisciplinary in their nature; some are very specific in their discipline. So we've got writers, art directors, interactive strategists, marketing consultant planners that cross multiple disciplines, so it's fun to have a team of these kind of experts all in one place that the clients can count on.
Russ: Okay. Well, John, I know that you've been doing this for quite some time; marketing for a long, long time and even nFusion for, what, almost ten years?
John: Ah, yeah. It's nine and-a-half years now.
Russ: Okay. Quite frankly, marketing has gone through lots of evolution even during this ten-year period.
John: Well, let me take you back much further to give you some context for why we think nFusion is particularly unique and it really starts 30-some years ago. When I got out of grad school I started selling computers for IBM. I worked with companies in northeast Indiana and enjoyed that opportunity to integrate technology into their businesses but I realized that my love was not going to be in the sales profession but wanted to get back into a much more marketing kind of role.
Russ: But it was probably good to get that under your belt, then?
John: It was a great - great first real job.
Russ: Yeah.
John: I learned a lot about technology; learned a lot about working with companies in the sales discipline - really couldn't have asked for a better starting job but I wanted to find something in advertising and looked around IBM and found this little product that was about a year old. Got a chance to join that particular department and the Independent Business Unit as the first person added to the advertising department and that was the IBM PC. So this goes -
Russ: Whoa, whoa, whoa that's -
John: - goes back to the early '80s.
Russ: Boy and that was such a significant product launch and very unique for IBM; their approach to the product to advertising, marketing and distribution.
John: It was really a great time to cut my teeth into that - the marketing discipline because it was a product that was bringing technology to consumers in a way that had never been brought to them before. There were some other, smaller companies but having that gravitas that IBM brought to the category and really legitimized it brought a industry ecosystem together that made computing personal really for the first time.
Russ: Well John, I mean the whole thing about it, the Charlie Chaplin approach. All the packaging, everything was very unique for IBM and very leading-edge, too.
John: I do a lot of guest lecturing at different universities and try to explain to the students who weren't even born when this campaign was running -
Russ: [Laughter] Right, right, right.
John: - what it was like to work on the Charlie Chaplin campaign and I really try to describe it with an analogy that to me, it was very similar to the Apple iPod advertising of today.
Russ: Right. Absolutely.
John: That it seemed cultural equivalent in terms of the impact the product had, the impact that the advertising was having and it was just a delight to be a part of that.
Russ: Absolutely.
John: I was fortunate to manage the communications function that launched the next generation of PC products. IBM said, "Hey, you guys did a great job. Now you get to move to New York." Took a look at that option and at the same time was being recruited by a little PC company here in Austin, Texas that been started by a college drop-out from UT.
Russ: Right.
John: Ended up deciding that maybe it's time to take a flyer. So came out and joined the company, PCs Limited, at the time about 200 people. One of the first projects that I led was rebranding the company as Dell.
Russ: Wow.
John: That was in the late '80s. I had a great time being part of just a tremendous organization trying to figure things out as we went. A new business model that was bringing huge efficiencies to the PC category, taking on challengers, and so to have been a part of that early management team, help build that company from $60 million when I started to seven years later it was a $3 billion company. Through that process I started a variety of marketing functions for the company; the marketing communications function, the brand management function, segment marketing group and then ran the North American marketing team when it was still a consolidated organization. So had a great time, again trying to pull together a variety of different techniques, making sure that we're integrated across all the different disciplines that were going to be important for building demand for the Dell products. After 7 years of that and the 4 years of the PC company craziness at IBM, that 11 year stretch was really a whole lifetime of experience.
Russ: Absolutely.
John: And decided that it was actually time to step off the corporate ladder and get a life and decided that it was time to venture out on my own, spend a little more time with my family and started a marketing consultancy. Hung out a shingle and decided that I'd go out on my own.
Russ: Okay. Did it actually work out where you did get to spend more time with your family or did you immediately get immersed in too much to do?
John: For seven years running the consulting company was busy all the time but was able to enjoy the flexibility of aligning my schedule. I was able to coach their basketball teams, you know, when they were junior basketball players and then over time they switched to golf, so I got a chance to spend some time of the golf course with them and -
Russ: Sounds great.
John: - the life decision worked out great. I left about four years early from a financial perspective but in the big scheme of life it was a great move.
Russ: Great. So that lasted for -
John: So that lasted for about seven years. That brings up to 2001 and at that point, two of my former Dell associates, Tom Martin and Jay Watson and I had started the Austin Chapter of the First Tee Program which is a youth development program that uses the game of golf to teach life skills.
Russ: Okay.
John: And enjoyed our post-Dell reunion and collaboration on a not-for-profit. Decided that why don't we put our heads together and come up with a for-profit venture, which turned into what we know today as nFusion. And so I drew the straw to be the CEO and have been making the thing work for the last nine years.
Russ: Okay, great. We're talking with John Ellett, co-founder and CEO of nFusion and we're going to be back with more with him after this. You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.
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Russ: This is the BusinessMakers Show heard here and online at theBusinessMakers.com and continuing on with John Ellett cofounder and CEO of nFusion. You just got through telling us you got together with two former employees of Dell that you were playing golf with and you guys ended up forming nFusion. Tell us about the decisions made and how you defined who you were going to be and what sort of clients you were going to go after.
John: Our concept was relatively simple but it turns out to be pretty complex to execute and the concept was creating a marketing services partner that would be the ideal partner we wish we had had when we were running a marketing organization. And so the design points were pretty simple. There were three key design points. One is it needed to be an integrated offering and that came from frustrations that we had in working with some of our previous agency partners at Dell where you'd throw out a business problem that needed to be solved or a challenge that you were trying to overcome and the ad agency came back and said, "Well you need more ads," and the direct marketing agency said, "Well you need to send out more catalogues," and interactive firms said, "Well you need to build some new websites and it's like -
Russ: And they were competing, actually.
John: And - yeah, and well, how about we think about this as a holistic problem -
Russ: Right.
John: And what are the pieces that need to fit together. So that was a frustration that we wanted to try to minimize on the behalf of marketing executives that were facing the same kind of issues. So we needed comprehensive, holistic, integrated set of capabilities. The second was we recognized that technology was fundamentally changing the marketing process and how people were buying products, how they were searching for information, how they were communicating with each other, how they were being entertained and we needed to build into our DNA as a company that desire to stay up with the latest technologies and the impact that they were going to have. So in 2001 that was the Internet -
Russ: Right.
John: - and you play that forward and it's now social and mobile and other components that are continuing to evolve so we felt that having that DNA built around understanding the role that digital was going to play in the marketing process would be fundamental. And then the third piece was that we wanted to have an organization very accountable to business results and that if we created a marketing organization with a full portfolio of capabilities and a business model that didn't really care what the answer was that it would put us in a position to more effectively recommend what worked and then a desire to really understand what was working and what was not working and so measurement became, again another fundamental part of our DNA. How do you make sure that you're measuring what works? And if all three of those ingredients came together then we felt we would be able to put together the kind of marketing services company that other organizations would like to work with and off we went.
Russ: It seems like you've kind of stuck with that.
John: We have but when you think back to 2001 the dot com bust, 9/11 -
Russ: Right.
John: - and at that point it was the worst year for marketing services firms since the Great Depression.
Russ: Okay.
John: So we set off with all kinds of energy, expecting that, you know, the world would come find us and it turned out to be a little bit more challenging time than what we thought but we remained true to the design principles of what we were starting and over time we persevered. We did good work for our clients in the early days and eventually the reputation spread. We got the opportunity to work with a lot of fine companies and are here and continuing to do well.
Russ: Cool. Just you bringing up the challenging period: 9/11, the dot com bust, quite frankly running your own company can be challenging even in good times but boy, those were extraordinarily tough times. I think our audience here on The BusinessMakers likes to hear about persistence and determination, but did you actually ever consider shutting down nFusion?
John: No. I think we believed from the very beginning that we had the right idea and as we've seen research from leading industry analysts describing what the agency of the 21st Century looks like, they basically are describing what we've built and so we were pretty confident that we were on the right track and that if we could be persistent that eventually it would pay off and fortunately it did.
Russ: Okay. I was particularly tuned into the single ingredient about being accountable to business results. Is there sort of some magic that you guys have incorporated into your process that makes that real clear?
John: It's really more of a cultural discipline than a magic ingredient. And if you take folks from previous agencies who didn't necessarily have that culture and bring them here, they notice a profound difference and one of the advantages we have is because of our strong digital base and so many of the digital tools are much more measurable, much more accountable than general broadcast advertising as an example. It's much easier for us to put into practice what we've been believing from the beginning which is show the results and adjust and optimize accordingly.
Russ: Does results always mean orders, transactions? I guess it could also mean name recognition and more strategic long-term things as well. And I guess you have to clear that up in the beginning?
John: Absolutely and that's one of the starting points of relationships we have with the clients is we want to understand what are they looking for and then how do we break that down into the right marketing goals and objectives and sometimes that's building brand engagement so that they have customers that are more familiar with them, are more attuned to reconsider them, go into a retail location and buy. In other cases it's a company that wants to literally send you to a website and have you click and purchase right off the site. So making sure that you understand what the key metrics are going to be attuned to their business model and then putting together the plans and the KPIs accordingly.
Russ: Right. Talking with John Ellett, cofounder and CEO of nFusion and we'll be back with more with John after this. You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.
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Russ: This is the BusinessMakers Show heard here and online at theBusinessMakers.com and continuing on with John Ellett, cofounder and CEO of nFusion. Well, I would assume, John, that you've had some interesting projects and some interesting clients along the way.
John: That we have. It's been great to work with a lot of very good companies, literally from A to Z. Anheuser-Busch, Brinker, which is the parent for Chili's and On the Border, Comerica Bank. Nokia, Samsung and Zimmer Spine as an example, so -
Russ: Wow, that's impressive. You have them in alphabetical order, don't you? [Laughter] That's great. Yeah. Well those are some pretty interesting companies. I bet they're fairly demanding, too.
John: Of course -
Russ: Okay.
John: - but clients - whether they're large or small - they should be demanding. Marketing's a really critical part of the success of the organization and they should expect a lot and I think that's one of the reasons that they like working with our team is the team tends to deliver pretty well for them.
Russ: If you were able to categorize with those clients that you just mentioned, what percentage of effort went into the interactive category versus consultancy versus standard, traditional media.
John: In everything that we do there's some level of consulting and strategy involved -
Russ: Sure.
John: - the execution of that right now is probably 2/3 to 70 percent digital in some form or fashion whether that's building a Facebook presence for Calloway Golf or redoing a website for Michelob Ultra to get ready for their Superbowl television commercial.
Russ: Whoa, whoa, wait. So you were integrated into their Superbowl strategy?
John: We were. We needed to make sure that their campaign that featured Lance on TV -
Russ: Right.
John: - was brought to life in the digital world with their new website.
Russ: Wow. So you were brought in for that part. Did you compete for other parts of the Anheuser-Busch or was that -
John: With AB, our relationship is primarily as an interactive, digital agency.
Russ: Okay.
John: And so we were competing with others in that similar discipline for that particular segment.
Russ: Oh. So when they came to you about the interactive portion of that, they didn't just come and say, "Okay, there's an interactive portion, you always get it, John, here go - you competed against other interactive agencies for that - and do you know how many you competed against?
John: In their case it's usually three or four that they tried to work with and we were one that they keep on the consideration list.
Russ: Cool. So they look at yours and they look at the other interactive proposals and yours won and is that pretty standard that when you're presenting proposals -
John: That we win?
Russ: - that you're - [Laughter] Yeah, yeah! Right. But that you're almost always competing against somebody else who's actually developed the idea?
John: There are so many different styles of client/agency relationships and in some cases with Brinker, as an example, we're their primary digital agency. So we're their go-to firm for chilis.com and On the Border as an example. With Comerica Bank we've got a fairly long-standing relationship with doing their media planning and buying and helping develop some of their interactive capabilities as well. So ultimately the preferred relationship is a partnership that is one that takes on a longer life but other clients, their model is to have multiple agencies and look for particular bids on each particular projects.
Russ: Yeah, it sounds like it must always be challenging and exciting around here.
John: There's never a boring day.
Russ: Of all the things that we've talked about in this interview, I want to kind of roll back to one early on. Before nFusion, when you talked about joining this little company called PCs Limited, that those of us who have been around a while knew that that obviously eventually became Dell and you talked about being there when the name change actually happened. Tell us about that a little bit.
John: Well, we were getting ready to open an office in the U.K. and if you know how the nomenclature for British companies works, "Limited" is like saying "Corporation" and so going into the U.K. with a name PCs Limited just didn't make any sense.
Russ: Okay.
John: So it was time for a change and they said, you know, "John, go figure out what the new name of the company needs to be," and -
Russ: Right.
John: - so I brought in some professional help trying to figure out some names that would be better than that, more appropriate and we came up with a whole range and at the end of the day, the one that worked best and worked within the time frames of the decisions that needed to be made were the legal corporate name of the organization which was Dell Computer Corporation. That wasn't Michael's first choice but in the end, it turned out the be the right nomenclature.
Russ: Wow, wow.
John: And it's done well for the company.
Russ: I sort of remember the transition. I don't remember thinking, "Well, golly, you know, why did they do this?" But that was huge in the history of that company.
John: Well it was one of the many milestones in the organization. Certainly the name change, going public was a huge milestone and then after I left the milestone that everyone was ultimately working towards was number one market share and that was, you know, going from this little pesky challenger, with 200 people in 1987, to in the late '90s getting to a number one market share position.
Russ: Okay.
John: So that was something worth aspiring to and fortunately the company stuck to its guns and made it.
Russ: I would call that business results for sure.
John: It sure is, yeah.
Russ: John, I really appreciate you sharing this story with us but - and before I let you go, let's imagine that we have a real young, creative person that's into marketing, into advertising that's listening to this interview right now and thinking, "Man, I want to do my own thing." What advice would you give to an aspiring entrepreneur?
John: Well I'd give it to somebody that's thinking about starting their own organization, whether it's a company, a not-for-profit, creative business a technical business - I've got four stages that I think are critically important and the first is to have a dream. You know, what's your passion? What's the dream that you're trying to achieve? What's the vision that you're trying to bring into reality? The second is build your team. Who are the people that you want around you that are going to be able to bring that vision to life, that dream into fruition? The third is what's the scheme? What's the actual plan that you're going to use to make that business happen or that not-for-profit happen and then the fourth is ice cream. Don't forget to celebrate your little successes along the way. You're asking a lot of people and to take time to actually celebrate. So dream, team, scheme and ice cream.
Russ: That is so cool. John I really appreciate your time and for you sharing your story with us.
John: Well thank you very much.
Russ: You bet. That's John Ellett, cofounder and CEO of nFusion. And you've been listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.