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Corey Velan is the co-founder of FixMeStick (Adam Stein/FixMeStick)
Corey Velan is the co-founder of FixMeStick (Adam Stein/FixMeStick)

Case Study

Believe it: Radio ads pay off for high-tech startup Add to ...

THE CHALLENGE

When Corey Velan and Marty Algire launched Montreal-based FixMeStick in May 2012, they were surprised by how hard it was to generate sales through online advertising. They had assumed Internet advertising would be ideal for their product – a USB stick that removes viruses and malware infections – because all of their potential customers are online. However, spending $500 of their own money on Google ad words, and another $500 from a Google matching program, yielded only one sale. Their experiments with advertising on Twitter didn’t do any better. How could they spread the word about their product and get people to buy it?

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THE BACKGROUND

Mr. Velan and Mr. Algire were friends from Montreal who spent over a decade working for a company that developed security software and sold it to large corporations that private labelled it for end consumers. They knew that no matter how good the software was, viruses were still getting through and people were having to take their computers to technicians to be cleaned, which was time-consuming and disruptive. They started FixMeStick to “make it dead simple for a non-technical consumer to get rid of viruses themselves,” says Mr. Velan.

In April 2011, they left their jobs to develop the technology. “We based the product around a solution that techies had been using for years,” explains Mr. Velan. “We were those techies,” he laughs. “Viruses can hide from security software on a computer and so the most effective way to detect and remove viruses is to run the software on a known-to-be-clean external device, before Windows starts.” Thus, FixMeStick was born.

It’s a USB device, loaded with licensed anti-virus scanners from three different anti-virus software companies, that runs while the main system is off, so viruses are inactive and can’t fight back. A user simply inserts a FixMeStick into the computer’s USB port and double-clicks ‘Run FixMeStick.’ Once the computer is cleaned, the FixMeStick is removed and the computer is restarted.

Consumers can buy a FixMeStick for $59.99 and it lasts for one year, when it needs to be recharged. During the one year period, the FixMeStick can be used an unlimited number of times on up to three computers per month. Its software is kept up-to-date during the year through an internet download when it is cleaning a computer.

A year after leaving their jobs, Mr. Velan and Mr. Algire were ready to introduce FixMeStick to the market, but found it difficult to attract customers. Their attempts at advertising over the internet were disappointing, but in retrospect, not surprising.

Without a track record, it’s difficult for any new firm to be perceived as trustworthy. This is especially true for companies that operate over the internet and have no local presence.

But there was an even greater challenge with FixMeStick because the internet security industry is known to be plagued with scams. Indeed, a recent Symantec report states that a considerable number of programs purporting to clean viruses, actually install them. FixMeStick’s primary market consists of people who are not technologically sophisticated, and they are unlikely to take a chance on buying from an unknown online business.

How could Mr. Velan and Mr. Algire distance themselves from the charlatans in the industry and communicate that FixMeStick was a legitimate player offering a valuable product?

THE SOLUTION

In May 2012, as they were launching the product, Mr. Algire was interviewed on AM 770, a Calgary radio station. Within 24 hours of the interview, they had received 84 orders from the Calgary area. “We realized that we hadn’t even considered traditional advertising media,” states Mr. Velan. “We didn’t know anything about it, but this was a great response and so we decided to see how well radio ads would work.”

They started experimenting with radio ads. Mr. Velan recounts: “We thought it would be really hard to create a radio ad, but we learned that the stations have their own creative team and are well set up to help you. We learned that the most effective ads have a recognizable voice from the station, such as a radio host. We send them a FixMeStick so they can try it out and relate it to a personal computing problem they’ve had. We focus on top AM stations because they have a slightly older, less technologically savvy listener base that fits the demographic of our largest customer segment.”

They started with traditional 30-second ads, but are now experimenting with longer and shorter ones. Radio ads are now running in Vancouver, Calgary, Edmonton, Winnipeg and Toronto. The ads have worked so well in Canada, that they’ve just launched radio ads in Florida and Arizona.

THE RESULT

FixMeStick is an example of a company that quickly discovered how to match advertising strategy to customer base. Mr. Velan and Mr. Algire are thrilled with their success to-date. As Mr. Velan states, “We’re profitable after only a year in the market, which is unusual for technology-based start-ups, we’ve sold 15,000 FixMeSticks to customers, and the product has received great reviews – 4/5 stars from PC Magazine and 4.6/5 stars on Amazon.com.”

They attribute much of the sales momentum to the effectiveness of the radio ads. The product was initially available only through the company’s website, but it’s now available online through Amazon and other online electronics retailers. They’ve also attracted a large distributor to make it available at retailers such as London Drugs, Canada Computers, and (in August) Costco. They’ve even been invited to pitch on CBC’s Dragon’s Den this coming year, so stay tuned.

Becky Reuber is a professor of strategic management in the Rotman School of Management of the University of Toronto.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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