4-Tell foresees bright future

Stevenson startup steers online customers to products

By Gordon Oliver, Columbian business editor

Published:

 

Ken Levy is full of ideas, and the successful entrepreneur appears to be onto something big with his latest business venture.

The Stevenson resident is CEO of 4-Tell, a company he co-founded in 2009, which helps companies boost their e-commerce sales by steering customers to products they might like in addition to what they set out to buy. 4-Tell’s business customers report sales increases of 10 to 25 percent by using the constantly updated software, Levy said.

His firm, incorporated in Oregon but operating largely out of Levy’s home office in Stevenson, has 100 business customers so far and is growing at breakneck speed, Levy said.

“This year, we’re growing 25 percent month over month,” said Levy, who works with co-founder Neil Lofgren and two sales representatives. “We’re having trouble handling all the demand.”

The company’s annual revenue is less than $1 million, but Levy anticipates the company could grow in five years to an annual revenue of $80 million and 150 to 200 employees.

The basic concept of 4-Tell’s service is familiar to anyone who has bought a product from Amazon.com or rented a movie from Netflix. In both cases, a selection leads to recommendations of other products or movies they might enjoy.

4-Tell brings a similar targeting tool to online businesses. Most of its early adopters are small companies, but Columbia Sportswear and Icebreaker are among its customers and it hopes to appeal to retailers of all sizes. The price of 4-Tell’s services is based on page views, but generally ranges from $50 and $675 per month. Levy aims for companies to achieve revenue growth 10 times greater than the cost of 4-Tell’s service.

One of 4-Tell’s earliest customers is HitchSource of Hood River, Ore., a seller of trailer hitches and related products. HitchSource integrated the 4-Tell software into its website a year ago and has seen its online sales increase by 10 percent, said owner Ken Whiteman. He likes that the software constantly updates based on a customer’s purchase history and new additions to his store’s product line.

“The beauty of it is that it works as things evolve,” Whiteman said.

Levy predicts that online commerce will consolidate into a small number of what he calls “e-commerce platform providers,” which will deliver online services to businesses large and small. And he thinks its likely that one of those providers will want to buy 4-Tell. That would provide a return to investors and an infusion of cash for expansion.

“My dream would be to be acquired by a company that gets our vision,” he said. “I would like to stay on and let the company grow.”

For now, Levy, 46, and Lofgren, 43, the company’s vice-president, are working to attract a new round of funding to do more marketing and increase capacity.

Proven track record

Levy has worked on several startups, and his biggest success is an audio technology for improving sound quality in digital devices. He sold a portion of that company to Digimarc Corp., a Beaverton, Ore., technology firm. He then worked as Digimarc’s senior director of technology and market development from 2000 through 2004.

That track record has helped him gather strong financial and technical backing. 4-Tell won the Gorge Angel Investors Network Competition last year, receiving $120,000 in prize money. Private investors, including Levy’s professional colleagues in the local technology industry, boosted the company’s total cash infusion in 2010 to about $250,000. This year the company secured another $25,000 in funding from the Portland Seed Fund and also is negotiating for financial backing from the Keiretsu Forum, a national angel investment network.

Levy has never been short on ideas, even back to the 1980s, when as a college research assistant, he developed the world’s smallest thermometer circuitry, according to his résumé on LinkedIn. That feat is listed in the Guinness Book of World Records. More important, he has 70 patents and is well connected in the Portland area’s entrepreneur and technology communities.

“It’s been invaluable having people willing to invest or help me,” he said.

More recently, Levy has been fascinated by the idea of developing an “intelligent agent,” an industry name for a tool that tracks Web behavior. That interest was piqued in 2009 when Netflix launched a competition with a $1 million prize for a tool to improve the accuracy of predictions about how much someone is going to enjoy a movie based on their movie preferences. Levy’s proposal fell within the top two percent of submittals to Netflix, a confidence-builder that led him to launch 4-Tell.

Now, he feels he has a winner. “It’s been a fun adventure,” he said.