Russell Rothstein wasn’t looking to get into the online dating business when he was inspired by Lavalife.
A happily married man with two school-aged children, Mr. Rothstein was intrigued when he heard some of his younger employees talking about their adventures on the website.
“I was listening to these 20-year-olds talking about Lavalife and I wondered if I could automate my business model and match customers to products,” he recalled from his modest office in a north Toronto business park. “I thought, ‘Lavalife can help me develop my product.’ ”
That was in 2005. At the time, his business consisted of outsourcing its sales team of about 90 professionals to start-ups and venture capitalists looking to hire a sales department for short-term projects. “It was a very labour-intensive business, I was working day and night.”
Mr. Rothstein, now 47, imagined an online model that would be a social network for small and medium-sized businesses, matching sales professionals to marketing professionals with similar goals and industry experience. Since its launch in 2007, SalesSpider.com has broadened in scope to just about everything a small business could want – from sales leads, to classifieds, to an amalgamation of government tenders worldwide. It boasts 615,000 members, 90 per cent of whom are based south of the border, and 20 employees. There’s no cost to users, and the company makes its money from advertisers, which include heavyweights such as CIBC, Verizon, Dun & Bradstreet and General Motors.
Mr. Rothstein isn’t sure why most of the company’s members are based in the U.S., saying business simply grew that way. He’s not concerned, adding that once you make it in the U.S., people will talk about you in Canada.
Looking to other industries for a successful business model is a strategy encouraged by Stewart Thornhill, entrepreneurship professor at the University of Western Ontario’s Richard Ivey School of Business.
“It’s one of the fundamental ways we teach students,” Prof. Thornhill said. “Take a model that’s been successful in another sector and look at the opportunities and potential for value creation in another.”
It’s been a proven formula for success. Big-box retailers such as Home Depot and Staples, for example, were built on the premise that since big-box grocery stores were successful, and home hardware and business supplies were still being sold by mom-and-pop shops, there was room for a similar strategy in that segment, Prof. Thornhill said. “The evolution of the big box, love them or hate them, were based on using grocery and mass-market retail strategies.”
On a smaller scale, Netflix, the DVD and online movie rental subscription business, was created after the founder, on his way to the gym, needed to drop off a movie at the rental store, Prof. Thornhill said. Netflix was inspired by subscription-based gym memberships that allow unlimited access for a fixed monthly fee.
Mr. Rothstein, 47, labels himself a serial entrepreneur. After graduating from McGill, he completed his MBA at the University of Western Ontario, and then founded Bizware back in 1984. Bizware and its three twentysomething founders made headlines in the 1980s for software that helped gas stations with the process accounting, tax and inventory used by retail stores.
After Bizware was sold in 1995, Mr. Rothstein joined Oracle for four years where he worked in sales. He then founded NorthPath, the sales outsourcing business that eventually became SalesSpider.com.
Sue Rutherford, director of marketing and communications at Ottawa’s Protus IP Solutions, has chosen to advertise on SalesSpider.com for the past two years because it reaches her target audience of small-business owners. SalesSpider.com had a visible presence online and at trade events and is a bridge between social media and business networks, Ms. Rutherford said. “It’s safe to say we’ve generated business because of them as we continue to advertise with them.”
Robert Blatt, a sales and marking executive at Montreal’s Access Communications, a two-way telecom company, said he has generated $150,000 in revenue because of his use of SalesSpider.com over the past 18 months. “I tried getting government tender information elsewhere,” Mr. Blatt said. “But for me to get it from multiple sites was too time consuming. SalesSpider.com has amalgamated it and posted it online.”
Mr. Rothstein, whose company was ranked third among FastCompany.com’s 50 Reader Favourites in 2008, continues to be inspired by other businesses. SalesSpider.com’s Opportunity Matching service was recently launched, which allows members to search for other users who have similar interests. It was sparked by an E-Harmony commercial where the dating site flogs its ability to make a love match based on matching profiles.
Mr. Rothstein, who has now been inspired by two dating services, said Facebook and Google have both paid visits to his office, but he is coy about the purpose of the meetings. He’s not opposed to flirting between them, which means there could be another business-centric love match on the way.
Special to The Globe and Mail