'Tis the season when the executive revolving door spins unusually quickly and where badges are swapped with blinding speed. Yesterday, I spoke with Doug Merritt, one of my favorite ex-SAP executives who has tipped up in the CEO role at Baynote. Doug is my kind of straight shooter. Ask a question, you usually get an answer you can use. When you're wrong, he's not afraid to explain why. He's one of the fastest thinkers I know. Explain something once - he gets it and moves on. A good example: he's only a few days into the job and was talking fluently about the service, value and where he'd like to take the company.
Baynote is a tiny business that manages one of the most difficult problems on the web: understanding and predicting behavior such that commerce and content sites in particular can optimize the user experience and thereby lift revenue. Baynote straplines this as the 'adaptive web.' Doug explained it this way:
"Dell.com is one of our customers. They want to ensure they provide the right help for potential customers so they can pitch the right product. The idea is that when done well, Dell sees a higher pull through to sales. Around tax time Intuit gets a ton of questions often around arcane tax treatments that are not always easy to answer. By making sure Intuit surfaces the right content, it gets a higher level of engagement and satisfaction improves."
So far so good but where's the secret sauce? Haven't we seen various tech companies doing similar things over the years? The short answer is yes but Baynote believes there is a specific way to achieve high value that others have missed. "The roots of this lie in cognitive behavioral psychology that focuses on brain activity. The research shows that people generally behave in predictable ways when viewing websites but you need to see that activity in order to figure out solutions and to understand what parts of the brain are being triggered to act. When you understand the things that make the brain 'work' in a certain way then you can design the user experience to optimize on both the customer and web property owner sides. I call it 'crowdsourcing the invisible crowd.' It's a scientific approach that goes well beyond personal recommendation."
How can you do that without having to do a lot of analysis? "In the pre-sales situation we get the customer's permission to deploy some low impact, non-invasive tags so we can then process behavior patterns. We then set up improvement trials and run A-B multi-variant testing to demonstrate the kind of engagement improvement that's possible. We process billions of artefacts as part of that testing. In the past, people thought that getting maybe two percent was good enough and especially on a high volume site. I don't think that's very interesting. Getting five to eight percent has a massive impact. We've proven that is possible."
I've long thought that one of the major SaaS benefits comes from the providers' ability to aggregate data as a way of discovering how to improve service or augment the offering. Baynote says that because its technology is non-invasive and is not picking up any personal data, it is able to look at multiple sites, learn from what it sees and constantly improve the solution. "We have 200 customers, they're all brands you'd likely know. The company is on a slow cash burn rate but needs to get to 1,000 customers in short order. We're well beyond the proving phase. Taking all these factors together, I think Baynote has a strong future."