23 July 2020
5 Growth Lessons from 8 Digit Revenue Startup | Knorex Cross-Channel Marketing
In this exclusive interview with Abhishek Kumar, VP of Engineering of Knorex, he shares 5 lessons he learnt from Knorex’s growth and where he thinks the advertising industry is headed.
You are reading the Business Development, Services and Marketing (BDSM) Blog. Named to reflect the punishing amount of discipline required to master the core tenets of the industries we service, we blog about current affairs, industry tips, tech developments and more.
A decade ago, Knorex was born out of A*STAR, Singapore’s lead public sector research agency.
Their core technology then was to commercialize Semantic Technologies, a hot area back then to enable computers to understand data and contents through a suite of technologies.
Fast forward many rounds of evolutions later, Knorex eventually sets its eyes on the online advertising world with its flagship product called Knorex XPO. It is a cross-channel advertising platform that is now powering Universal Advertising.
Knorex currently operates in 8 different countries across the United States and the Asia-Pacific region with over half of their staff involved in engineering and R&D.
Growth-wise, they are doing really well too. Over the last few years, revenue has more than doubled as they acquire multiple million-dollar contracts globally.
In this exclusive interview, our CEO and Co-Founder JJ Huang sat down with Abhishek Kumar, Vice President of Engineering at Knorex to learn more about their growth strategy and his view on the future of advertising.
A chanced path
As a spin-off of A*STAR, the Knorex team back then focused on building technology around text processing, data mining, and text analytics.
Around that time, there was a lot of buzz around the ability to understand meaning i.e. semantics. This resulted in an increasing emphasis on sentiment mining, opinion mining, and text processing.
During their exploratory path to finding product-market fit, they saw that their developed technologies and products actually fit well with online advertising.
This was in the early 2010s when the most common form of digital marketing technology was online banner or display ads.
Once they realized the potential their technology had in the online advertising space, they started investing heavily in building the core adtech capabilities and technologies despite the founding team not having any prior background in the space or industry.
After 10 years of relentless hard work, they succeeded in building a SaaS-based cross channel online advertising platform which allows marketers to seamlessly deliver their marketing messages to anyone in the world across all the major media channels, different types of devices, and supporting a myriad of ad formats.
Growth Lesson 1: Rapid iteration to build a product that customers want
Knorex team has been focusing on delivering products that customers want from their earlier years.
They started with an Augmented Reality (AR) product called SnapARise or affectionately known to some regional media publishers as iSnap. Using image recognition and optical character recognition (OCR) technologies, iSnap enabled people to discover information through newspapers and magazines in a more engaging manner.
Even back in 2013, they were already working with 8 major Southeast Asian newspapers.
The product was developed while they developed the business. This was their approach in their singular focus on building a product that people would want.
Abhishek said they conducted a product-market fit experiment before deciding that they were going to target small and mid-tiered agencies by carrying out small phase roll-out and rapid testing with partners and customers.
As a business, it is essential to constantly be aware of the specific wants and needs of the target audience.
In that regard, Knorex has also been deliberate in their pursuit of customer segments. If it were important to build the right product for the right customers, this has to be done.
Growth Lesson 2: Invest heavily in building a great sales team
“Build a great product and the customers will come,” but that really depends on the product and the market.
For what Knorex is selling, which is enterprise SaaS specifically, it remains important to have a great sales team to evangelize and close a deal as the sales process does involve multiple stakeholders.
“If a person doesn’t know the product well, how can he or she sell it?”, said Abhishek when he spoke on why they invested heavily in hiring and training a good sales team.
It is imperative that sales reps know the product they are selling inside out in order to deliver an effective sales pitch.
Otherwise, the people they speak to simply won’t be convinced since they are not even confident or convinced of their own product.
In Abhishek’s opinion, cold emails are still less likely to convert leads than sales calls. At least for the product that they are selling, in-depth inquiries, or probing comes with sales conversations of this nature. Having a great salesperson just makes the entire process magical for everyone involved.
Growth Lesson 3: Leverage on a network effect to scale your business
While JJ understood the importance of targeting the right businesses with a common and specific need, he wanted to know more about the practicality of investing heavily in a sales team if a business is only targeting smaller companies.
“Would the cost to revenue ratio make sense?”, he asked.
The short answer is no.
But to Abhishek and his team, this isn’t a big issue. At Knorex, they believe that they need to grow with these agencies. Many of these agencies are often overworked and need to have efficient tools to help them to up their productivity so that they can focus on serving their customers well.
“We have had many cases where once the agencies give our product a try to help them in their business, and put in the necessary resources to onboard, they can really scale their business with the tools that we provide,” says Abhishek.
Working with agencies allows the company to scale faster as each agency will bring in multiple clients of theirs.
Growth Lesson 4: Take part in activities unique to the local market
As the famous saying goes. “When in Rome, do as the Romans do”. And ‘do as the Romans’ they did.
When running a transnational business, it is a must to adapt your business to the local way of doing things.
As a clothing brand operating in a cold country, you have to adapt your products to suit local climate conditions. As an American F&B business operating in an Asian country, there is a need to adapt the menu to suit local taste buds and vice versa.
When Knorex first ventures into any new markets, its Business Development team will try to figure out how locals usually engage in business.
In the case of its US venture, the team discovered that trade shows or industry conferences are common avenues to discover new customers and products. Industry associations regularly host annual conferences to discuss the latest trends or have businesses showcase the latest products and services.
The company also regularly sends its sales reps to trade-related conferences or events to network and raise awareness about the business and its products. They also spoke at some of these conferences and on numerous occasions, sharing the stage with partners or customers of theirs.
Growth Lesson 5: Never underestimate the power of a good SEO strategy
Knorex has a dedicated SEO and content team where the two domains are viewed as a totality. The team focuses on producing content that discusses its products and how they align with the latest market trends.
This was what helped them raise a lot of awareness for XPO, their cross-channel marketing cloud platform.
According to Abhishek, many people whom they have never contacted actually reached out to them through such organic SEO efforts.
Many new leads found them online through some of the articles and thought pieces the Knorex team puts up. In fact, Abhishek attributed almost 20% of its sales lead originate from inbound marketing efforts!
Abhishek stressed the importance of businesses getting their outbound sales process right first before investing heavily in a good SEO strategy and paid advertising. These initiatives should be treated as an on-going effort that takes time to be effective and realize its full results.
The future of the Advertising industry
An increasingly digitized world of advertising
When asked how he views the future of advertising, Abhishek’s answer was “great!”
Digital advertising was already overtaking traditional media and advertising. With the onset of COVID-19, digital advertising has only accelerated even though overall advertising spend has decreased.
Many businesses are re-allocating their budgets into digital advertising, for instance, businesses are shifting from linear TV to over-the-top (OTT) media services such as Roku, Netflix, and Hulu.
Abhishek believes that more advertising dollars will shift into digital advertising and expects the industry to grow by double digits.
Continuous adaptation to everchanging data privacy regulations
Privacy concerns from consumers are pushing decision-makers to put more constraints on advertisers.
In January 2020, Google announced that it will phase out third-party cookies in Chrome. In Mar 2020, Apple released an update to its Safari Intelligent Tracking Prevention (ITP) which blocks cookies.
And these are but two of the many changes that have been introduced over the years to protect the consumers’ privacy.
The variation in laws across different parts of the world further complicates things. Hence, digital advertisers need to be constantly on the ball and be on top of the latest knowledge on data privacy practices.
What’s next for Knorex
The global pandemic has brought about both positive and negative impact on businesses around the world.
One of the unexpected positives out of the pandemic is the acceleration and growth in online advertising. Abhishek is particularly bullish and expects that the company is riding on this fantastic growth.
Naturally, this also means that the team will have to continue to (re-)look at its product line to identify opportunities for innovation to meet any potential wants and needs. One of the new areas is digital out-of-home (DOOH) advertising, a space that temporarily being impacted by the pandemic.
Meanwhile, in terms of manpower, he said that Knorex is working on empowering employees through training and is looking for the next generation of leaders to lead Knorex into the next decade.
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