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Entrepreneur Files
Coremetrics
UT Connection: Brett Hurt, BBA 94
Location: Austin, TX and Burlingame, CA
Brett Hurt (BBA 94) predicts that over time companies will be much more profitable online than through traditional means. “All the chatter about one-to-one marketing will come true,” he asserts. Lest you think he’s still breathing ‘irrational exuberance’ fumes from 1998, be assured that he’s turned his back on the rest of the hype from that era.
Indeed, Hurt’s marketing analytics company, Coremetrics, has survived and even thrived in the wake of the Internet collapse in part because he retreated quickly from the m.o. of the day to solid business practices and traditional wisdom. “It was all counterintuitive to me even then, but there was intense pressure from all sides to grow as rapidly as possible,” he says of the company’s rash of spending and run-up of employees. At one point Coremetrics employed 110 people and was paying $56,000/month for its office space in Austin. The company had leveraged its initial $15 million in venture capital with as much debt as possible, and Hurt was offered $100 million to sell the company on the dawn of its first commercial service launch.
“Things now are completely the opposite,” he says. “Now you frugally grow, you don’t hire someone until a department is almost breaking. Equity capital is very expensive, debt is looked upon unfavorably. The smaller the company and the more clients, the better.” The slim and trim Coremetrics now employees about 50 people in Austin and Burlingame, CA and has 60 or so large clients including Columbia House, Grainger, GMAC Insurance, Nortel Networks, Ann Taylor, and Wal-Mart. And even in today’s tough capital market, Hurt has garnered some $53 million in venture funding.
But the most likely reason Coremetrics has survived and continues to attract high quality investors is that it truly fulfills some of the Internet’s most outlandish promises. With a powerful application that captures and stores all customer and visitor clickstream activity, Coremetrics enables online marketers to attract high value visitors, optimize Web site design, and increase customer value.
Through an incredibly simple user interface, companies can understand exactly what influences customer behavior online and act accordingly. “The Web presents the most valuable opportunity to capture information about your customers,” Hurt believes. “You can track what ads people respond to, how they navigate through pages, what specific products they buy and at what price, what sales they respond to and what they walk away from.
“In a traditional business, repeat customers will get special treatment when they walk into a store,” says Hurt, whose parents owned a furniture business in Austin while he was growing up. “You’re going to target-market to them when you see them come in the door—you know what they’ve bought in the past, about how much money they’ve spent in your store, and what they might like to see. But you can’t do that on the Internet without data tracking.”
Hurt devised his data tracking system while an MBA student at Wharton. He and his wife Debra had started a business selling sports nutrition products online. “It occurred to me that I had no idea what was going on,” he said. “I didn’t know what ads were effective, I didn’t know how many people were visiting the site, or how many were leaving without buying something.”
Having written code since the age of seven, Hurt decided to create a Web application himself that would help him sell his
products online more effectively. “We were blown away by the results,” he remembers. “We were able to double the conversion ratio and double our revenues simply by mining the data and targeting our marketing and advertising to individual segments
of customers.”
Hurt had found his passion. And like so many other bright, ambitious young business students in 1999, he launched Coremetrics even before graduating from MBA school. But, unlike so many others, Hurt had a really good idea that has stood the trial of the last few years. “At one point we had 70 dot-com clients,” he remembers. “Only three are left.”
And what about going public?
“I don’t think in terms of taking the company public,” Hurt says in another departure from Internet bubble thinking. “I hire the best people I can, work on great service, and build the technology—going public will happen eventually, but only as a result of focusing on the right things.”
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