Optimizely launches Asia-Pacific headquarters in Australia
Dan Siroker, co-founder and executive chairman, Optimizely
Optimizely has set up its Asia Pacific base in Sydney, Australia as it looks to ramp up its presence in the region.
APAC operations will be headed by the company's managing director for Australia and New Zealand Dan Ross, who previously led customer and sales operations at Optimizely's San Francisco headquarters.
Ross told ZDNet that Optimizely was "pulled" into Australia through the strong demand and traction it has seen in the region. It has more than 350 Australian customers -- including AGL Energy, Atlassian, Booktopia, Chemist Warehouse, Deputy, Kogan, and Optus -- and decided to set up a local base to better support its growing regional customer base.
Founded in 2010 by Dan Siroker and Pete Koomen, Optimizely has six products, the core product being Web Experimentation, which enables non-technical staff to conduct A/B testing on the company's website. Using Optimizely's visual editor, the user is able to measure in real time the impact of changes such as the colour of a button or the wording in a call-to-action, or even pricing. All that's required is a line of JavaScript to be added to the website.
Optimizely's most recent product -- and currently the fastest growing -- is Full Stack, which Siroker said enables developers to experiment "deeply into their tech stack". For example, Full Stack can be used to test search ranking algorithms or mobile app functionality.
Siroker claims what "differentiates" Optimizely is the statistical model it uses, which was developed by Stanford University.
"Most of the world today, when they're trying to make decisions using statistics, they're relying on traditional statistics that have been designed for population studies or things like crop harvesting. That model of statistics relies on sample size calculators, it relies on a world that moves very slowly, where you want to be very accurate, and where the cost of getting it wrong may be life or death, like clinical trials for medicine. That model doesn't map well to the way that marketers want to do their job today," Siroker said.
"Today, people who use our product want to make decisions in real time. As soon as something is statistically significant, they want to incorporate the winner. They want to be able to control things like a novelty effect, so sometimes by just making a change to experience you see a short term positive impact but that may not be enduring. They want to control what they call false discovery rate."
Siroker said his role as director of analytics for former US president Barrack Obama during his 2008 campaign inspired the creation of Optimizely, though the seed of the idea could have been planted earlier.
He started his career at Google and said that the search giant's "culture of experimentation" is what made it so successful. Creating a culture of experimentation starts with a company admitting that it may not know what resonates best with its customers, Siroker said.
"Today, [Google] is the second largest company in the world predominantly because of Google Search. Every change to the search results are A/B tested; they try to measure the impact of all changes to engagement and then incorporate what won," Siroker said.
But seeing Obama speak in 2007 inspired him to leave his job at Google and volunteer for the former president's campaign.
"If you recall back to the 2008 campaign, it was known for being pretty innovative when it came to using data analytics ... what I saw first hand was the power of cultural transformation from one that is typically driven by the hippo -- the highest paid person's opinion -- into one where you use data to make decisions. That's why I started Optimizely -- to make it easy to go through that transformation," said Siroker.
At the time, Siroker and Obama's campaign team was using Adobe products to run experiments, which he admitted was difficult to use. As a result, they were only able to run a small percentage of the experiments they had in mind.
"The core premise was that if we could make it easier to do experimentation, organisations would do more experimentation. We don't claim to have invented the scientific method; we're trying to democratise it."
Siroker said Optimizely's regional expansion is timely given the imminent launch of Amazon in Australia.
"A lot of companies are pretty terrified of competitors like Amazon coming into their markets and disrupting them. What's exciting about the role we can play as an experimentation platform is that we can help these companies who are seeing the digital-first companies come to their market, go through digital transformation more easily," Siroker said.
"Experimentation is a critical asset in a new playbook that's going to enable people to innovate and compete in the digital world."
The company's products have been used in industries such as insurance, media, retail, superannuation, telecommunications, travel, and utilities. Its global customers include Allianz, Kmart, Netflix, Sony, Volaris, and CBS, ZDNet's parent company.
Dan Ross, managing director at Optimizely ANZ
Locally, one of Optimizely's energy customers discovered that its assumptions about the Western Australian market, which it recently entered, were not entirely correct, Ross said. AGL crafted and tested six different launch messages, only to realise that the one it thought would resonate the least actually resonated the most. The energy retailer then used the learnings gained to guide its launch messaging strategy.
"The retail energy market here is so competitive; switching costs for a customer is so low that the burden falls to the business to make sure that they're providing the best possible experience," Ross said.
"Energy retailers are using Optimizely to improve the initial [onboarding] experience, the support experience, and then also working toward the logged-in experience to ensure that when a customer comes to check their account it's as easy as possible to use so that any potential incentive to switch is gone."
Ross claimed that one local telecommunications provider is using Optimizely to improve both their online and offline experiences.
"They have a wealth of data that is fairly siloed between their in-store and online experiences. They are using Optimizely to try and provide a cohesive experience in what is obviously a very competitive and expensive market to play in," Ross said.
Optimizely is actively hiring a full go-to-market team -- with roles in Sydney and Melbourne -- to support its expansion in the region.
"The companies that are winning today -- not just digital-first ones, but even more traditional ones -- have the humility to admit that maybe they don't know 100 percent of what will work with 100 percent of their customers," Ross said. "I view a lot of my job is to help increase our collective expertise as a market so that we can all do [experimentation] better."
The company has raised $146 million to date from investors such as Andreessen Horowitz, Benchmark Capital, and Index Ventures.