Jinfo: Q&A with Steven Goldstein of Alacra

Q&A with Steven Goldstein of Alacra
Jinfo Blog

14th April 2009

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During April's Buying and Selling eContent conference in Scottsdale, Arizona, VIP Magazine had an opportunity to speak with publishers, intermediaries and content buyers. A series of brief interviews explore innovation in the content market and how publishers are working to meet the needs of today's enterprise content buyers.

Steven Goldstein is Co-founder, Chairman and Chief Executive Officer of Alacra. Formerly, Mr. Goldstein was Vice President of Strategic Planning for Knight-Ridder's Business Information Services division. In that role he was responsible for Knight-Ridder's acquisition of Technimetrics and its pre-IPO investment in Netscape Communications. Mr. Goldstein previously held a range of sales and marketing positions at Knight-Ridder's Business Information properties. He currently sits on the Small Business and Agriculture Advisory Council of the Federal Reserve Bank of New York. Mr. Goldstein has a BS in English from SUNY Albany and an MBA in Finance from Cornell University.

VIP: I was visiting the Alacra site for the first time in a while this past week. I've been following the evolution of some of your products and new offerings as they come out, but it was nice to take a few minutes to review how far you've come lately. I'm particularly taken with what seems to be a vigorous product-by-product development process. Could you talk about your product development process? Take Alacra Pulse http://pulse.alacra.com/ , for example: How did that go from idea to implementation?

SG: The basis for our product development process has been two things. One is talking with our customers and seeing what they have to say about their needs, and the other is to think about what else we can do with content aggregation, because that's the heart of what we do.

With regard to the Pulse platform, we'd been talking with customers for twelve to eighteen months about how to manage the onslaught of information on the Web relevant to investment banking but that would not necessarily show up in Dow Jones NewsWire or Factiva or resources like that. So that set us on our mission.

There were a few companies doing something similar. We were watching those companies very closely, and we thought that while they were doing a good job, it could be done either better or differently for our clients.

We came up with this Pulse platform idea, which builds on both mainstream media and alternative media, and looks for specific events, which we could aggregate and present to users, giving them better market intelligence and current awareness. It serves as a viable proxy for many of the products they might not be able to get access to and a variety of others.

VIP: So that process of hearing about a need, scoping the market, thinking about it in the context of your own strength and then testing something out -- is that a fairly standard process for you?

SG: Absolutely. Hopefully it works. That's the way it goes. Sometimes it doesn't work, but that's the process.

VIP: Alacra brings together a lot of high quality content in different formats to make it discoverable. But that approach presupposes that Alacra itself is discoverable. How do you make Alacra discoverable to prospects so that you can build the relationship with users and route them to the resources that are going to be most useful to them?

SG: We are trying to do that in two ways. The traditional way is that we have a direct sales force that sells our Alacra premium products to probably four to five hundred firms. We are in the workflow of these people who that need to look for and find information everyday. The challenge with dealing with that customer base is that they are pretty much set in their ways. They know what content they like and what content they don't like. We can only do so much to help a new publisher to get exposed to these people. That's really a big challenge.

The other way is through the Alacra Store. Most of the discovery is through search engine optimisation, which we spend lots and lots of time and money on. But it's very beneficial to us and to our publishers, and it gives us a starting point to upsell to people who buy things through the store.

Whereas three to four years ago I never thought search engine optimisation would be something we would be involved in, it has become extremely important. Even on the Pulse platform: We had some great press when it was released, but now 80 percent of the patrons find us through search. So now we're tweaking the pages to have a premium content link embedded into many of the things on that page to help users discover some of the content we have for sale.

VIP: And what do you see in terms conversion rates from some of the browsers to getting them into that premium content. Is it too early to tell at this point?

SG: I hope it's too early to tell because it's miniscule. I mean the conversion is really, really low. On our store we do about a quarter of a million page views a day. The conversion rates are very low, but the average order value is about $100 once we do convert, so we need to do a better job in a variety of areas that could boost the conversion rate and revenue, but I think it will grow. Well, I'm not sure the conversion rate will grow, but I think we'll be selling more stuff so the volume will grow, just based upon more page views.

VIP: In the last day and a half we've heard a lot about the pressures of shrinking budgets and buyers simply being told their budget has to be lower, and then it even has to be lower than what we agreed to yesterday. Are companies that are positioned to do âpay by the slice' in a good position to command certain amount of that declining budget?

SG: Going forward that cuts both ways. On the one hand we get increased transactional based sales for people who just don't want to be committed to a subscription. So that's probably good for us. For the publisher who ultimately wants to maintain or increase recurring revenue, maybe not so much.

Our goal is to make the publisher as wealthy as possible. The people who are cutting subscriptions to buy on a transactional basis are not helping the publisher's wealth. I think more importantly, people are just buying less and less stuff.

VIP: We see Alacra as a company that successfully marries content, technology and user orientation. Can you talk a bit about how you balance those elements internally? Are there times when content is king or the user experience trumps everything or the demands of technology really push things forward?

SG: It really depends on what our clients are asking us to do on that particular day. Right now we are working on technology enhancements to the Pulse platform because in order to sell it, it has to have a bunch of functionality that it doesn't have right now.

On the other hand we've got customers saying we're going to switch from Content Provider A to Content Provider B, and we need Content Provider B to be integrated into the portal that you built for us. You need to go license content from Provider B and load up the content. So that will drive us to go get the content and work with the publisher to make sure we can integrate the content.

And then we have other situations, where the company's been a customer for awhile and some of the installations are six or seven or eight years old. They need to be upgraded. So to improve the user experience, to do well by the customer, we're saying, 'Look, you've had this thing for a long time. It's old, and we want to give you the new stuff. When can we do this?'

It really is customer, customer, customer: they tell us what to do.

VIP: Do you ever find those three areas are in conflict with each other?

SG: Only in terms of how to allocate resources to get the most stuff done as quickly as possible.

VIP: Anything else you'd like to share with VIP readers at this point?

SG: Good luck getting through the tough times. Hopefully this will end quickly.
I think if you're a buyer, despite the budget cuts and the crunch, there are a lot of things to choose from now. There are so many choices in terms of how you meet your users' needs and how you can more flexibly negotiate with publishers or integrators or aggregators.

VIP: We'd like to see that happen.

SG: I think it will.