Dave Scott

Most entrepreneurs strive for world domination. Marketfish founder Dave Scott has already achieved it -- at least in one playful form. Scott is a competitive board game player who once took the crown at the world championships for Risk, the classic game of "Global Domination."

There are certainly parallels between running a startup technology company and managing your armies in Siberia, Siam or South Africa.

"Always be on the offensive, and don't stand on your laurels that's for sure," said Scott. "And never get into a war on two fronts."

Scott has avoided the two-front war so far at Marketfish, though it has been a struggle given that the 17-month-old startup is attempting to shake up an established industry by inserting itself in the middle of lucrative marketing transactions. Marketfish essentially creates a way for sales professionals to hook new customers by tapping into highly-targeted marketing lists from publishers and other data providers.

We caught up with Scott recently at the Marketfish headquarters in Pioneer Square to chat about everything from the company's recent financing round to competitors in email marketing. We also learned about the company's BYOC policy -- but more on that later.

You just raised $2 million from former Razorfish CEO Clark Kokich and others. How are you going to use the new cash? "Hopefully make some money. What is really nice about our business is that we already have customers. We have about 65 customers right now, and we actually think we have enough customers to break even. So, the idea is to focus on those 65, get to break even and then decide if we want to go out for a venture round after that."

You bootstrapped the business during the first year. How did that go? "It was completely self-funded. So, I sold my car, liquidated my 401k and floated the company to the tune of about $250,000 in a personal investment.... It was a lot of Ramen noodles, and I almost shut down the business three times."

Why did you keep the business going? "The bottom line is that I am actually one of our customers. I have been in marketing for 18 years, and I've done a lot of lead generation and I've felt the pain enough that I knew there was an opportunity here. It really was the fact that I knew there was a real problem that I was trying to solve."

How do you describe what you do? "Simply put, we basically help customers generate leads. And the goal is that we think we can give them more qualified leads cheaper than any other alternative that is out there.... If you are a dentist, for example, we can help bring traffic right into your door. If you are a business like IBM, we are going to give you leads that are qualified that go right to your sales funnel."

Scott/PSBJ photo

How do you come up with the marketing lists and the leads you pass on? "We work with partners. Our technology is really a platform, and so we have both inventory and then we have advertisers that want to get access to that inventory. And so some of our partners on the list side are traditional publishers like Tennis magazine, Spin magazine ... and we actually have over 120 million records in our database today."

Do those publishers and associations charge you for access to their lists? "No, it is all a (revenue) share. We house their data and manage it for them, and then when someone transacts we take a percentage of the share and give the lion's share back to the actual list creator."

How much does it cost to rent one of the lists? "The average transaction tends to be between $20,000 and $30,000."

So, the publishers work with you because they can generate a little extra cash off their membership lists? "Sometimes a lot. A good list can generate $5 million a year, so it becomes a significant line item. In a situation where newspapers are actually going under, it is the list rental money that's keeping a lot of these publications afloat."

You mentioned that PayScale used your service to conduct an email campaign to HR managers. What results did they see? "The average open rate for an email is around 10 percent, and an average click through rate is around two percent. We got a 16 percent open rate and a six percent click through rate."

Email marketing has been around for a long time. How are you different? "It is a very big and mature market. So, if you take a look at the email marketing market, it has guys like Exact Target, Lyris, Eloqua, Constant Contact.... When it comes to email marketing, there are three reasons why you want to email to a customer -- one is to acquire them, one is to retain them -- which is called retention marketing -- and one is to nurture them. So, if you already have a house list, then you are doing one of these two things (retention or nurturing).... What happens, though, if you don't have a house list? You are a brand new startup and you don't know who your customer is? That is why you have to rent ... and that's where we come in and that's where acquisition marketing begins."

What else can you do with Marketfish? "Let's say that I am going after CTOs and CIOs in the healthcare field in Seattle, Washington. I can do that in our system.... We allow you to narrow down to the exact type of customer that you are going after in a very, very short period of time. We get really granular. An average list has anywhere from three to five ways that we can slice and dice it, and we are increasing that number to over 50 different ways."

What keeps you up at night? "What I love about the business is that this isn't rocket science. We are not introducing a new technology... It is all execution, which means we have to do things flawlessly. And because we are in a world where we haven't taken any venture money, we've only taken a little bit of angel money, every dollar counts. So, we do things like BYOC when we hire someone, they have to bring their own computer. We just can't afford to spend a dollar. Any misstep we make could cost us."

A CLOSER LOOK AT DAVE SCOTT

Age: Just turned 40 in early December. To celebrate, friends gathered for a Roaring 20s murder mystery dinner in the University District.

Hometown: Sacramento

Education: William & Mary (computer science); MBA from The Wharton School of The University of Pennsylvania.

Work experience: Entellium; Intermec Technologies; Peoplesoft.

Hobbies: Sailing, scuba diving, board games.

Car you drive now (after selling his BMW to finance the business): Hyundai Genesis

Favorite board game: Settlers of Catan

Worldwide ranking in Risk: 31st (Has attended the world championships in Indiana for the past 16 years, winning once in the late 1990s.)

Book you recently read: "Blue Ocean Strategy" "It is the story of how companies in old industries can re-invent themselves (for) brand new growth industries."

First way you made a buck: Sales associate at Egghead Software. "I remember helping a customer buy a copy of Borland database, and I told them that I could configure it for them and he paid me $300 to do it and I completely failed, so I had to give him his money back."