DiscoverOrg digs up data

Growing firm's niche is tracking who's who in IT departments

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DiscoverOrg is a young, fast-growing technology startup that’s stayed mostly unknown in Vancouver since it moved from Columbus, Ohio, last year. It won’t be hidden for much longer.

The three-year-old company, which maintains a custom database of organizational charts from the information technology departments of Fortune 5000 companies, grew 330 percent last year. It’s on pace for similar growth this year with a 2010 revenue forecast of $2.5 million to $4 million, said co-founder Henry Schuck.

A year ago, Schuck, 26, and his business partner Kirk Brown, 28, were the only employees at the company’s offices at 3312 E. Fourth Plain Blvd. Since then the two have grown the company to 26 workers, with 18 in Vancouver.

Their company’s growth comes even as its founders resist an industry trend to gather data with social media.

Many methods

DiscoverOrg is part of a new class of customer relationship management software and services that are putting a new spin on business lead development. Their clients don’t buy and install software, but instead pay a yearly subscription to access their database remotely via the Internet.

DiscoverOrg has tailored its database specifically to business-to-business IT sales. Sales and marketing professionals at technology companies such as Xerox and Adobe use DiscoverOrg’s database to generate contact lists for e-mail campaigns and sales calls to pitch their products to other businesses’ IT departments.

“We (Kirk and I) don’t come from a technology background, but we know how to sell it, because sales and marketing people value data above all else,” said Schuck, who completed his law degree at Ohio State University in 2009.

Sales tools have gained in popularity during the recession as companies try to generate more leads, even as they slash marketing budgets, according to Stamford, Conn.-based market research firm Gartner.

But the methods companies use to build these tools vary widely.

Some customer relationship management companies rely on Web crawlers to troll the Internet for information to plug into their databases. Other companies, such as DiscoverOrg’s competitor Jigsaw, build databases by trading information with clients through online social tools — the latest trend in the industry, said Adam Sarner, a Gartner analyst.

All of these methods have pitfalls. Web crawlers can collect larger volumes of information than painstaking phone calls, but the websites they pull from aren’t always up-to-date and the data get stale quickly, Sarner said. The online community model is also risky because it relies on customers to input the information themselves and the database grows only in proportion to the number of users the company recruits, he said.

“There’s nothing to say you have to be social,” Sarner said, “particularly when there’s no strategy associated with it.”

Cold-calling

DiscoverOrg generates all of its own data. Three years ago, Schuck and Brown paid a consultant about $8,000 to build their first database. And they’ve since updated it and worked to populate it with information on some 86,000 IT professionals by making cold calls to the same people their clients would try to pitch.

“It’s a huge market; no one creates the data themselves,” Schuck said. “We’re like a call center that does research.”

The company’s analysts make about 100,000 calls per month via Internet telephone to IT departments at all of the largest companies in the U.S. The information they receive is entered into the database and updated every three months to maintain its accuracy.

DiscoverOrg clients tap the online database for a company’s IT hiring manager contact information, its budget, or a host of other details that could help zero in on a sale. DiscoverOrg now also offers a series of free webinars for its subscribers on a range of topics such as how to leave an effective voicemail message and how to conduct a successful e-mail campaign.

“The whole cold-calling concept is gone when you use our database,” Schuck said.

As the company takes off, Schuck and Brown are pleased by their decision to move to Vancouver. Originally from Los Angeles and Newberg, Ore., respectively, they considered several locations in the Pacific Northwest before settling on Washington “for tax reasons,” Schuck said.

Their Vancouver headquarters also costs significantly less to rent than the same space in Portland, he added.

Buddies since attending college together at the University of Nevada in Las Vegas, they are now building houses in the same subdivision near La Center.

They hope to reach $10 million or more in revenue within the next few years.