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- 2012 - October - 8th -

First Coast Success: David Brown, Web.com

by Karen Brune Mathis, Managing Editor

David Brown is the chairman, president and CEO of Web.com, the Jacksonville-based company that creates websites for small and medium-size businesses, almost 3 million of them.

Web.com is based in Flagler Center in South Jacksonville and has 500 employees in town and 1,400 more among other locations. Web.com is a publicly traded company.

Brown, 58, founded Web.comís predecessor company, Atlantic Teleservices, in 1997 and was its CEO until it was bought by Website Pros in 1999. He returned a year later and has been CEO since. The company became Web.com in 2008.

Before creating Atlantic Teleservices, Brown spent more than 20 years in banking and finance, including serving in leadership positions in the Jacksonville headquarters of both Barnett Banks and Florida National Banks, during the 1980s.

The Daily Record interviewed Brown for ďFirst Coast Success,Ē a regular segment on the award-winning 89.9 FM flagship First Coast Connect program, hosted by Melissa Ross.

The interview is scheduled for broadcast this morning and the replay will be at 8 p.m. on the WJCT Arts Channel or online at www.wjctondemand.org.

The following are edited excerpts from the full transcript.

Web.com projects annual revenues of $500 million this year, more than double 2011 revenue of $234 million. How do you do that?

We use magic. Actually, weíve been very fortunate. We are in a growth space right now as small businesses are beginning to adopt the Internet. The space we serve is growing very rapidly. Itís also consolidating and so weíve used both organic growth, getting lots of new customers and selling them more things, and also acquisitions to grow our business. We doubled twice, once in 2010 and again in 2011.

Is growth in that segment of the market an indication of the economy, is it an indication of social media, or what?

Itís really a technological change thatís occurring. Just like when people went from using radio to TV or then from using landlines to cell phones. You see now businesses going from using print media and traditional advertising to online media. Itís an enormous secular change that we are benefiting from right now.

How did you come up with the idea and the name of Web.com?

We bought a company by the name of Web.com, so we inherited the name. We actually went public under the name Website Pros. We love that name and there is a great deal of heartstring attachment to that name, but Web.com is just a better name for a company that does all things that small businesses need. We had to gracefully make the change back in 2007.

What do your employees do? How does a customer reach you? And what happens next?

Thatís one of the beauties of our business model. Weíre an unusual technology company in that weíre not using technology to eliminate the people in our business. We use it to make our employees more powerful, more effective in communicating. A typical day for our employees is talking to customers, asking them questions, listening to their concerns and then trying to educate them on how they could use the Internet to be more successful. If you were to come to our building today, youíd see 500 employees, all of them with a headset on, talking to customers, most of them smiling, all of them hopefully being patient, considerate, polite and professional. Thatís a core value of our business model.

What do small businesses need when they come to you?

Mostly they need someone to hold their hand, educate them on how they can use this big Internet to help grow their business, how they could do it efficiently, with low risk, and do it over the long haul. One of the biggest problems small businesses have is they begin to play in the Internet and they build their first website and whoever built it goes away.

What we do is we talk to you every day. The Internet is a growing and living process and therefor youíve got to be attentive all the time.

Whatís next? How do you see the industry changing?

Itís one of the great beauties for someone like myself who has worked for a long time. You better be on your toes and you better think young, because itís evolving and itís changing very rapidly.

Weíre doing today things that we didnít even imagine two years ago. Next year, mobile will be upon us and youíll be seeing the entire marketplace using mobile phones to search for information, to shop, and so weíll be launching products in those areas, social, whether itís Facebook or Twitter or some of the new Pinterest-type phenomenons. All of those things now are engaging consumers, theyíll be engaging small businesses, so weíre there to help small businesses maximize their productivity with those resources.

Weíll be evolving with new products and educating our employees who can then turn and educate our customers.

How do you anticipate those changes? How quickly can you adapt?

One of the beauties of our business is there are very few old people like me. There are mostly young people and they change very rapidly and they are very comfortable with technology. We basically have to be very attentive to the young people in our business, listening to them and listening to our customers.

We can change very rapidly. We created our entire Facebook product in about two months and then ramped it up over 2010 and 2011 to thousands of sales per month, and that has continued to grow.

How many small businesses do you see coming online in the next year or so? What is your projection?

We think weíre at the very front end of what we would call mass adoption. Thatís the time when the mass market finally capitulates and says, ĎOK, Iím going to buy my TV. No matter what it takes Iím going to buy a TV or Iím going to get a cellphone.í You can see how rapidly those two phenomenons happened.

Weíre in those processes now in the United States where small businesses are saying, Ďwell I have my Yellow Page ad and I have my newspaper ad, but I think I better do something on the Internet, too.í

So weíre going to see adoption move from 50 percent of small businesses who have a website to the 80 percent range. Thatís going to happen very quickly.

Whatís most exciting to us, only 2 percent of small businesses have a social-networking presence. And a single-digit percentage has a mobile presence.

All of that is going to go up into the double digits very rapidly and thatís good for our business.

When you say a social media presence, what does that include?

It could include anything from being in RetailSpeaks, which is a social network for mom-and-pop small businesses that sell gifts, to being in Facebook, to being in Pinterest, to using a Twitter account.

There are hundreds of social network opportunities. There are small vertical market-oriented groups that share information on the Internet. All of that is going to be very powerful and helpful for small businesses.

I think of us as a middleware company. Weíre the glue that sits between the technologist and the small business and helps make it work.

How do small businesses cut through the clutter to reach their customers? How do customers cut through the clutter to find businesses?

Thereís a lot of hype. Especially with the Facebook IPO, you saw tremendous interest in social networking. Itís not for everyone. There isnít utility for everyone, but there can be for certain users.

I like to give this example. When you go to get your hair cut next time, youíll see all of the product on the shelves there, and that particular hairdresser is doing a variety of things ó cutting hair, helping with whatever they help with and theyíre also selling product.

They have hundreds of clients and they need an efficient way to keep in contact with their clients. When they decide to discount their products, they can get the message out. Facebook is a great means to be able to instantaneously send a message to 200 customers that now is the time to come in and buy a product, but you have to have their friendship. Youíve got to have their connections.

What we do with a customer is help them understand the few simple, basic things they need to do.

One, have good content, and good content in social networking usually means syllables, not paragraphs, so your writing skills have to change from eloquence to simplicity.

Second, you have to have people youíre talking with and be connected with ó friends.

We will take just those two elements and create a very successful Facebook presence for that beauty salon where they have a big network of people theyíre talking to and theyíre talking to very effectively. Thatís how we make it work for our customers.

Can you address your cost structure for a small business who might want to check it out?

Weíve built a process where we can deliver products for tens of dollars a month, up to $100 a month, and that $100 would be everything you need to be successful on the Internet.

Youíd actually get found on the first page of a Google local search for your key words. Youíd have email marketing a variety of different services.

Single-digit dollars per month would get you in the game.

That kind of pricing lowers the barrier for small businesses to put their foot in the water and begin to see some of the benefits.

Then we see customers that buy more products and we have customers that pay us thousands of dollars a month, but itís the most powerful marketing tool they have in their business at that point.

Web.com is the umbrella sponsor of the PGA Tourís Development Series, which is now known as the Web.com Tour. You also sponsor the Jacksonville Jaguars. What does that sponsorship bring to your company and what do you give in return?

Weíll start with the Jaguars sponsorship. We are headquartered in Jacksonville, always have been, itís our largest employment base. And weíve historically been a very quiet company. Weíve really just gone about our business of helping small businesses.

It dawned on us that with 500 employees in the local market, it was time for our employees to know that we had built a significant presence in the city and there was something to be proud of and that we supported the city. So we stepped out to support the Jaguars.

Thatís a Jacksonville-oriented sponsorship and it is very focused around our employees and the pride they have in the company and in supporting businesses here.

The Web.com Tour championship is totally different. We also serve the entire United States and, in some cases, the world. Twelve percent of our business is outside the U.S., so we needed to find a way to take this business that no one knows exists but has 3 million customers and build positive name awareness. Golf turned out to be the best avenue for that, and good things happen sometimes for a reason ó right place, right time.

The Tour was looking for a new umbrella sponsor, we were looking for a way to gain ubiquitous name recognition and positive recognition, so we were able to easily strike a deal and the icing on the cake for us is that weíre not only the Web.com Tour sponsor, but we are the official marketing partner for the entire PGA Tour.

We have access to every PGA Tour event and every market the tour plays in. Weíre launching a nationwide locally oriented, small business forum program where we will be sending teams of our employees to every tournament and inviting hundreds and then thousands of businesses to come and be educated on how they could use the Internet and have it help their business.

That allows us to then connect with local communities throughout the U.S. without us having to open offices in every one of those communities.

We did our first one in Boise, Idaho. We are doing our second one here in Jacksonville. Our third one will be in Dallas and next year we will do at least 25 of these. The following year, 50, then 75.

You work with 3 million businesses. How big do you see that number getting?

I think about serving one customer at a time. I certainly hope we can serve more. There are 30 million small businesses in the U.S. and most of them need the kind of help that we provide. Weíll just have to see how effective we are in reaching them.

You do other community support as well. Can you talk about that?

Weíve taken a different approach to community support. We support our employees and as they grow up in our business and become more mature and begin to develop a heart for something outside themselves, then we step up and support them.

Weíve supported a variety of things from the local soccer team in Jacksonville to the Red Cross, to Haitian relief, to a variety of walks, to the YMCA.

We really are interested in developing the heart of our employees to support the community and we give them time off. We also support them by matching their contributions and dollars in time.

Thatís how the company has worked and now that will change with the Web.com Tour. The PGA Tour gives more money to the charities in the United States than all other major sports combined, and weíll now be a powerful force in helping to grow that.

Youíre a native of Ponte Vedra Beach. Talk about your early years. What did you want to be when you grew up?

At first a garbage man and then a Persian history professor. That is what my degree is in. Unfortunately the year I graduated, the Shah of Iran was exiled from Persia, so I made a quick diversion.

I spent one summer surfing and then my when parents kicked me out of the house and told me to get a job, I got a job at Barnett Bank.

I long ago gave up trying to be anything. Wherever I am taken, I do the best I can at whatever it is at the time. Iíve had a wild career as a banker, as a private equity partner and then as an entrepreneur and each one of those has been a fantastic opportunity.

Your degree is from Harvard College?

I got a degree in general studies, which really meant that I was a Persian history professor, and I was the only one the year I graduated.

What did you want to do with that degree?

I thought I was going to go to Oxford and get my Ph.D. and be a professor someday. It just didnít work out that way.

My dad was a college professor, my younger brother is a school teacher at Fletcher, so we have a heritage in our family of being teachers and to some extent even my job today, there are parallels.

Barnett and Florida National are two banking giants that took root in Jacksonville. Through mergers and acquisitions, Barnett ended up as Bank of America and Florida National has become Wells Fargo. What was banking like when there was a Barnett and a Florida National?

There probably is no better job to have started out in and worked in than to have worked in either of those two banks. The management teams, the opportunity in Florida, the growth in Florida at the time created, quite frankly, a wild world, an open world for all of us, for all the young people that worked there. They were very collegial organizations. We were very lucky.

You will find in our company a number of folks that are former alumni from both of those banks. Because they were well-trained, they have great values and theyíve become the fabric of our business as well.

You seem to have followed a path of serving in corporate leadership and then creating companies. What drives you to start your own companies?

I learned a lot and I have an obligation to take that and use it. One of the ways you can use it is by another corporate gig, or another way you can do it is by starting something yourself, and in this case I started something myself to see if it was doable.

Itís hard by the way. It never gets easy. Thatís what drives me. Iím not going to give up until we do a better job at it, and we just continue to try to do a better job.

You are not the typical entrepreneur who starts a small business and slowly grows it with a five-year or 10-year plan. Is that your strategy?

I have no five-year plan and no 10-year plan. I used to when I was younger, but they never worked out, so Iíve given up on that.

Iím focused on today, tomorrow, the relatively near term and something more fundamental. I focus on our efforts to follow our values, to do what we say we are going to do.

You can also do it the other way. I call that management science and that worked for me as a youngster, but I am following a different approach now, which is a more purpose-driven, value-oriented approach. Weíll see where that takes us.

What are some of the biggest challenges youíve faced and how did you deal with those?

Iíd say the biggest challenge in this company is back in 2000, when the dot-com bubble burst and everybody was going out of business and everyone panicked, coming back to the company when it had been sold and having no money and watching the industry collapse around us.

We had to basically survive, hire back people, and we made it through that, but it was strictly perseverance. We never accepted the possibility that we would fail.

Beyond that there havenít really been very many difficult things.

We are very blessed. Itís a growing market, we have good people to work with, the right values in our company, surrounded by value-oriented people.

What motivates you?

My motivation is to follow a set of values I have learned through my career and not much more than that. Itís pretty simple. I go to work every day doing my best. I donít measure myself on the result. I measure myself on the intent and on the effort. I keep trying and thatís really what motivates me.

Whatís next for Web.com and whatís next for David Brown?

For Web.com you should continue to see us grow. I think youíll see us grow even faster than we have. I think itís our time for the company and thatís good for our employees and thatís good for our customers. Youíll see us continue to acquire as well.

You wonít see us leave Jacksonville as long as I am the CEO of the company. We have established the roots of the company so well here that weíll be a Jacksonville-based company for the long term.

For David Brown, I love what I do so thatís all that I can see right now, doing what I do and training and developing a management team that can operate a half-a-billion-dollar company and then if we are fortunate enough to continue to grow like I think we will, they have to be prepared to run an even bigger company. That is a full-time job for me.

kmathis@baileypub.com

@MathisKb

356-2466

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