Putting her money where her word-of-mouth is

Fiona Adler’s new business has tapped online opinion and turned it into a monetised web directory. She tells AMANDA GOME that setting up WOMOW was done the same way she conquered Mt Everest – one step at a time.

By Amanda Gome

Fiona Adler’s new business has tapped online opinion and turned it into a monetised web directory. She says that setting up WOMOW was done the same way she conquered Mt Everest – one step at a time.

Fiona Adler, 33, is already a successful entrepreneur. Now she has launched her second start up, WOMOW (Word of Mouth on the Web), an online directory based on reviews – but not before she climbed the Himalayas, did an MBA and had a baby.

This overachiever shares with Amanda Gome the tips and lessons she is now applying to her second venture. She is also happy to answer your questions: Email feedback@smartcompany.com.au

Amanda Gome: It took you nine years to build your first business, Invizage Technologies, with partners Paul Adler and Brad Bond.

Fiona Adler: Yes. It was an IT services business started in 1996, providing IT services for small and medium businesses. We sold it in 2005. By then we had 100 employees getting towards $10 million revenue. I joined the business in 2000 when we had 20 people. Before that, I was working in marketing and HR and thought rather than help all these other companies, I would help grow something that was ours.

What were the big things that helped you take the business from 20 to 100 staff?

The big thing was aligning staff interests with our customers and developing a staff incentive scheme linked to bonuses. We started a customer services survey and then explained the results to the engineers so they could see the score. We then linked the bonuses to the results. That had a big impact by changing the behaviour of some of the staff and alerting us to problems.

How did you market it?

We initially took out local ads in papers, directories and word of mouth. We focused on getting the service right and keeping them in touch with customers, and letting then know what else we could do for them.

What study have you done that has helped your business grow?

I did a bachelor of business and have studied an MBA part time. That was great because it is very different studying when you have experienced a business first hand. When you are an undergraduate it is hard to understand the application of what you are learning.

What was so good about the MBA?

While the theory can be simplistic, the application can be tricky and understanding the complexities helps. It also helps with time management. And it gives you a real appreciation of the different lenses through which you can look at a problem. You do group work and are thrown against a whole lot of problems. Because I have an HR background, you look at a problem differently than if you have an engineering background. When you are thrown into study with people from these different backgrounds, you learn there are different ways to see a problem. I learnt to solve problems with a bigger picture in mind.

How has this helped you grow your new business?

I don’t just look at it with the customer in mind. I look at business models. For example now I look at the way new media and communication channels are helping businesses spring up.

You sold in 2005. How?

We were noticed by Telstra at the Telstra Small Business Awards. We had brief discussions with Telstra that fizzled out. That was OK because although we said we would sell if the price was right, it didn’t get to that. We had a lot to add to the business. Then they approached us when we had 100 staff, so it was a much bigger management problem.

Then you had a break. A tough break.

Yes, we climbed Everest. It was a two month expedition on the mountain and we trained really hard for two years before that to get physically fit. All up we probably spent 10 years preparing.

Would you do it again?

No. It was very difficult, but not for the reason you think. It was the altitude and lack of oxygen that makes it so much more difficult, even if you have the skills. That also makes it longer because you need the time to acclimatise which makes it mentally challenging. We also climbed at night.

So you got to the summit?

Yes. I left at 9.30 at night, You could only take two steps at a time because you are bent over double trying to get oxygen. I finally got to the summit at 8.00 the next morning.

So you shared it together?

No. Paul had a hiccup. He was ahead of me because he was faster, but then I caught up and thought uh-oh. He had a problem with his oxygen tank which was meant to last eight hours, but only had an hour of oxygen. He had the fright of his life but a Sherpa coming down the mountain gave him enough oxygen to get back. He was within 100 metres of the summit when he had to turn back, so he was devastated.

Weren’t you worried about his ego?

We had talked about it beforehand and agreed if something like this happened, the other would keep going. He trained again and went back and did it last year.

You are the third Australian woman to reach the top of Everest. Is there anything you took from the experience of climbing to the summit that you could apply to business?

It’s like building a business; it’s one step at a time. When you are at base camp and looking at the summit it is daunting to see how far you have to go, but if you focus on getting to camp one and break everything down to small steps, it is achievable. That is what it’s like building a business.

Your new business; where did the idea for your new business WOMOW come from?

I had the idea in 1999. I was looking to renovate our home and thought how good it would be to read reviews of renovators on the net. But we had a big mortgage then and we couldn’t work out how to monetise it.

Then last year I had my MBA finished, no other business to worry about, less pressure on my income, and teamed up with Brad to launch WOMOW. I had also seen review sites in the states. The idea is to provide a word of mouth information directory based on the user experience. It was about putting users’ needs before advertisers.

How long did you plan the business?

Six months. That included the development of the website, which cost less than $20,000. We were going to outsource everything, but the quality of the web development wasn’t up to scratch, so we did it ourselves with open source; Linux and LAMP PHP platform.

What was wrong with it?

The quality of the coding and the attention to detail. The whole business is based on the website, so it has to be based on well-designed principles.

How did you monetise it?

You can subscribe for extra features. It’s $39.05 per month to upgrade your listing. You don’t pay to be listed. Businesses get listed when people rate for the first time. In fact many businesses are not even aware they had been rated.

What are the extras?

You can receive alerts if you are rated and you can add in extra details such as photos, special offers.

How has it gone?

We have 20,000 ratings; some have rated several times. Very few have taken up the offer, which just stated in July.

But this is not a business that costs much to run and we don’t have lofty revenue goals.

How did you market?

Through networks of families and friends, plus word of mouth takes over. Plus companies that have had a good review want to give something back and then start reviewing.

We had SEM in our business plan but we found that instead of buying key words we should out the time and effort into search engine optimisation.

When people write about businesses, Google picks up words even when there are spelling mistakes. For example an animal psychologist found that he was referred to on our site as a dog whisperer. Then he found he got a heap more traffic as people searched for dog whisperer and found him.

Are you making any money yet?

Very little.

What are the challenges?

Australian businesses are not used to public scrutiny. Some haven’t got their heads around developing an online reputation. They think it all might go away instead of engaging in conversations with customers.

What happens when a business gets negative feedback?

They get in a far worse position. We have to educate the businesses to respond to feedback.

What percentage of reviews are negative?

About 10%. But most are positive as they want to tell you about the good businesses.

We are starting to let companies know via email that they have had a review. Also if you look up “best hairdressers in Melbourne” you can see what businesses are saying on WOMOW.

What if people give fake ratings?

It happens, but we are confident we are capturing nearly all of those.

Have angry business owners with negative ratings threatened to sue?

Yes. We also go back to the reviewer and ask them to substantiate the review. Sometimes we ask them to say it again in language that is not defamatory but based on fact. If you can’t contact them, you take it down.

So how many employees?

Only three: Paul, Brad and me.

That’s a lot of work for you all…

It’s exciting. It doesn’t feel like work. And we all work from home and the hours are flexible. I have a baby so I can juggle and work after hours if I have to. I get most of my work done at night. Brad works more normal hours.

What were your start-up costs?

Less than $50,000.

So are you going to get rich with the new venture?

No. We are not building something up to sell. We have got to cover our costs and it has to be commercially viable.