WomenCONNECT.com founder Susan Williams DeFife built an
online brand leader with grassroots efforts and a community-oriented platform
targeting a lucrative niche: women in business.
Women are expected to become the
Net majority before year's end, but just five years ago, less than 10 percent
of online users were female. Yet even at that time, visionary Susan Williams
DeFife recognized the potential of online services at two levels: first, as an
ideal venue for women to network and gather information, and, second, for the
e-commerce possibilities represented by the arrival of a World Wide Web.
In January 1994, DeFife began
talking to other professional women to gauge their awareness of online services
like CompuServe and Prodigy. A steady stream of their feedback
indicated a lack of online groups and services targeted specifically to women,
confirming DeFife's expectations and driving her to launch online forum womenCONNECT.com (WCC) on the Prodigy
network in October 1994.
In the process of starting a risky
Internet business in the pre-browser era, DeFife defined the cutting edge of
networking for women with a new-fashioned concept for connecting professional
women and women business owners via a timeless new medium.
WomenCONNECT helped introduce the
female demographic to the Net by building a community based on the specific
needs of like-minded executive women. By spring 1996, DeFife had gained a large
enough audience to convince her to invest in a full-fledged Web presence. WCC
immediately found its target market on the Web, and the growth since then has
been tremendous.
DeFife's diverse career experience provided her with most of the skills
she would need to run a niche business online. Entering the business world as a
radio and TV reporter, DeFife learned about the inner workings of the media and
how to create content on a fast deadline. Her subsequent term as press adviser
to Delaware governor Mike Castle taught her about publicity and marketing, as
well as the political aspects of women in business. Next, DeFife served as the
executive director to Women Executives in State Government, a leading
non-partisan executive women's organization. There, DeFife says, she gained a
deeper understanding of executive women's specific needs.
WCC represents niche marketing at
its best. In fact, an old cliché certainly rings true in DeFife's quest to
unite women professionals: "It takes one to know one." DeFife says
having an intimate knowledge of her audience was a key factor in her early
decision to pursue the WCC concept.
"I saw the particular value
of the Internet as a tool for women in business," explains DeFife.
"This audience has largely been ignored online -- and pretty much offline,
too. But online, this is a group that had established themselves in their
careers, they had money to spend, and they're controlling an enormous amount of
purchasing power in this country."
Indeed, this lucrative niche includes
an estimated 40 million women professionals and about 8 million women business
owners. "I felt that not only would women see the need for this service
and benefit from it, but there was an economic opportunity there that would
make this business go," says DeFife.
But even with a long sheet of
statistics to support her notion of an online network for women in business,
obtaining the funding to really grow the company was a challenge and a learning
experience for DeFife.
DeFife took WCC a long way on her
own purse strings. However in 1997, she began to recognize a need for outside
financing, which presented her with challenges she had never faced before. To
illustrate her point, DeFife points out that less than 2 percent of venture
capital money goes to women in business.
"It's not a discrimination
issue," insists DeFife. "This is really a lack of awareness, both on
the part of women entrepreneurs and the investors."
DeFife explains that she, like
most women entrepreneurs, needed to learn how to access venture capitalists and
how to make a presentation, including mastering speaking the right language in
order to obtain financial backing. "This is about money, and we have to
talk about money," says DeFife. "If [women] can talk about money,
then we can get funded."
From the standpoint of the
investor, DeFife says it's a deal flow problem -- the venture capitalists just
don't know where to go to find deals with female entrepreneurs. "Venture
capitalists want to make money, and they don't care whether you're male, female
or Martian," says DeFife. "If you've got a good business opportunity,
they're going to fund it."
DeFife's first encounter with a
venture capitalist was at a dinner in Washington, D.C. DeFife was seated next
to a gentleman, who, at the end of the evening, invited her to meet with him to
talk more about her company. The dinner was in April; a reluctant DeFife waited
until August of that year to send the potential investor a business plan. Their
first meeting was soon to follow, during which DeFife announced that she did
not want the investor's money.
"I think he thought that was
an interesting negotiation strategy because he started this hyper-sales mode
about why I did want their money," jokes DeFife. But she maintained her
position. The venture capitalist respected her decision, but suggested that she
work up a budget of projected costs to complete the WCC project anyway. DeFife
took his advice back to her office and concluded that she needed about $750,000.
"Here I was working 60 hours
a week for a part-time income, and I really had to make a decision to either
let the company go or grow it," says DeFife. "I knew in order to grow
it and be competitive, I would have to take capital."
DeFife decided this investor was
not the right fit, but she says the experience changed her thought process to
at least consider outside capital.
DeFife next enlisted backup in the
form of a business partner, Gary LaFever, who had been her attorney. His
expertise in negotiating venture capital deals would help lead WCC through its
first round of financing, which came from an angel investor. DeFife says the
angel really worked her over.
"He said things like, 'The
biggest problem is going to be being taken seriously,' and, 'It's a good thing
you brought Gary on board because he's a man,'" recalls DeFife. "And
then he asked me if this was a social cause, and if I was looking for a
donation."
DeFife first perceived a "men
are from Mars, women are from Venus" air about the conversation. But she
quickly realized the truth: She still had to learn to talk about money. During
the next six months, this angel continued to nit pick DeFife's presentations,
making her feel like she had something to prove to the investor and herself.
"It turned out that the angel
investor has been my mentor," reveals DeFife. "I did get his money,
but what I got along the way was so much more valuable. I learned a great deal
about talking to investors."
Finding success in obtaining
funding is often not about changing your business plan, says DeFife; it is
about changing your presentation. She says presentation is more than product;
presentation is talking about what the product is, what the market is, how you
are going to get the product to market, who your competitors are, what the
return on investment is going to be, and what the exit strategies are going to
be. And DeFife says these are issues women must learn to talk about in order to
secure capital.
WCC employs a traditional Internet
business model -- if there is such a thing on the Web -- where revenue streams
come from both advertising and e-commerce. The company currently enjoys an
equal balance between these streams, but DeFife expects the e-commerce side to overrun
advertising revenues in the long run, as women become more accepting of
ordering online. DeFife says that while e-business is exciting, there are
plenty of obstacles to overcome as the Internet evolves.
"It's a brand new medium.
There are no case studies. Nobody knows what the exact formula is," says
DeFife. "So the exciting part about what we do is that we are creating
something from scratch, and we're really plowing new ground."
On the other hand, says DeFife, it
can be difficult to know which road to take on the Information Superhighway.
"We're really finding some things that are hitting with our audience, and
because we are a smaller company, we are able to turn on a dime when we see
trends changing," she says.
DeFife has employed two fundamental
techniques of the traditional Internet business model to near perfection.
First, and foremost, is building a strong community of women in business. WCC
features original stories concerning everything from career transitions to
starting a business, from building credit to elder care, and from salary
negotiation to stress management, and more. Each article includes links to
other related areas within the WCC community, such as chats, bulletin board
discussions, news and articles. The site also includes services like a
directory of women-owned businesses and a calendar of women-related events.
On the e-commerce end, WCC's
affiliate program rounds up vendors that are focused on the same target
audience, like Avon, Garden.com and Godiva, and brings them to a virtual
storefront, allowing women to browse by store name or product category. WCC's
affiliate programs include popular branded sites that hock books, music, toys,
flowers, jewelry, clothing and gourmet foods. WCC gets a commission on all
sales originating within its community.
In addition to standard affiliate programs,
WCC has struck significant deals that differentiate the community from other
leading female-oriented Web sites, like Women.com
and iVillage. And, in a strategic
partnership between the online world and the physical world, DeFife brokered
deals with the two leading newsstand brands for women in business, Working Woman and Working Mother magazines.
"We decided that it made a
great deal of sense for both of us to partner. We manage their Web presence,
and it is very much interrelated to what we do, linking back to our site, so
the branding and visibility for both of us is very high," explains DeFife.
She says she also recognizes that these magazines reach a fairly large audience
of women, a lot of whom are either not online or don't have a reason to come
regularly to a Web site.
"What we are doing is
reaching out to a group that is right in our niche and pulling them
online," says DeFife. "That's as important as some of the other grass
roots efforts we are doing."
Affinity programs are also a big
part of WCC's success, and DeFife has created several unique partnerships with
companies that complement the community's mix of free services for busy women.
For example, DeFife struck a deal with The Career Builder Network to better serve
the needs of corporate-ladder-climbing members. This service allows companies
that are especially interested in attracting female applicants to post jobs in
the WCC Career Center via Career Builder's service. In turn, visitors can
conduct employment searches or use the Personal Search Agent to seek jobs with
specific criteria. The user is then alerted via e-mail with job leads. Similar
partnerships are in place with MBNA
American Bank and CompuBank, to
provide a WCC-branded credit card and online banking services.
Unique programs and exclusive
partnerships were an important part of building the WCC community. Increasing
the user base, however, is an ongoing objective for DeFife. To this day, she
has made no investment in advertising, choosing instead to rely on word of
mouth to grow a community of like-minded women.
DeFife grows the WCC member base on grassroots
campaigns and keeps users coming back with a wide array of free services, such
as daily editorial content, online discussions and interactive tools, along
with e-commerce -- all targeted to women in business.
While many companies have chosen to spend millions of
dollars on advertising to attract "eyeballs" to their sites, DeFife
has taken a more cost-effective approach, greatly dependent upon word of mouth.
Her previous ties to women's organizations help DeFife spread the word to the
very segment that helps strengthen and adds value to the WCC community concept,
and the results have been astounding. DeFife's classic grassroots campaign has
generated a 1,000 percent increase in traffic growth during the last year, and
6,000 percent during the last two years with no advertising budget to speak of.
"If I pay to bring you in today, but then I have to pay to bring
you back tomorrow, then my site isn't doing what it needs to do," says
DeFife. "I need to be able to attract you in, and you need to want to come
back again and tell three or four of your friends to come to the site, too.
That is community building, and that's what we are trying to do here because
it's the retention rate that is becoming the most valuable thing in this
industry right now."
Though much smaller in size than
iVillage or Women.com, WCC's audience is coming back an average of every other
day. And they are clicking through to WCC's e-commerce partners at a rate of up
to 48 percent.
"Those numbers are getting us
a great deal of attention in the industry," says DeFife. "The
grassroots community building is our focus, and it is paying off now."
Personalization is another key
ingredient in DeFife's recipe for enticing repeat customers. "When
personalization technology became available, it was clear that this was another
opportunity to save women time and pull the most relevant information up to the
highest level for them, again encouraging repeat visitors," says DeFife.
WCC's personalization features include custom alerts with article summaries and
an individualized home page customized to reflect the content preferences of
the user.
DeFife has a simple strategy for
dealing with the hordes of female-targeted Web sites that are now starting to
spring up on the Net: Focus even more finely on the niche of women in business.
"If we were out there trying
to compete as a women's Web site, we would finish fourth," says DeFife.
"We are not a general-interest women's site; we are a Web site for
professional women and women business owners."
WCC is the brand leader for its
niche, and DeFife says this is an important weapon to wield against the
competition. "Building a brand from scratch is a real challenge, but
because we stayed focused on business and career, and we have gone out and
marketed to the core of our audience, we have developed a very important brand
leadership," she explains. DeFife says as companies wake up and recognize
the economic power of this niche, they are looking to see who is doing it
right. And DeFife is sitting in the catbird's seat.
DeFife has big plans for her
brand, most of which she can't disclose for competitive reasons. However, she
does hint at focusing on this niche group beyond the Internet. Says DeFife,
"We want womenCONNECT.com to the single-largest point of contact to this
audience, whether it's online or offline, and all of the things we are doing
are focused around that objective."
Name: womenCONNECT.com
URL: www.womenconnect.com
Location: McLean, Va.
Founder: Susan Williams DeFife
Founded: 1994
Industry: online community
Employees: 16
Revenue: $550,000 (estimated 1998)
Copyright © 2000 by Virtual
Advisor, Inc. All
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