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composite image from strangeloop's website

THE CHALLENGE

After operating a successful internet-based business for five years, Vancouver brothers Joshua and Jonathan Bixby soon realized that when it came to corporate websites, bigger wasn't necessarily better.

The websites they were helping to expand with ever-richer media were getting slower and slower, making it harder for customers to navigate and, consequently, for the companies to do business.

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The pair decided to make speed the focus of their work rather than content, and founded the company Strangeloop on this very premise in 2006.

But when the brothers came on to the scene with this new venture, they were met with resistance.

Most companies still held the view that speed had to be sacrificed in order to have a large and high-impact web presence. Quick functionality was considered a 'nice to have' rather than an essential component of the experience.

Strangeloop needed to convince new customers of this need for speed.

THE BACKGROUND

Prior to launching Strangeloop, the Bixby brothers ran IronPoint Technology, which created content management system software to help clients upload websites and content to the Internet.

As the company grew, expanding its client base to 200, the brothers began to run into efficiency problems on their customers' websites.

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"We would have discussions daily about speed," says Joshua Bixby. "Every time we added functionality, a site would slow down. To make it faster, we had to take functionality out or remove graphics that compromised its appearance."

The brothers decided to make this problem the focus of their new business. They sold IronPoint and set to work designing a computer appliance that fixes customer websites so that their pages render faster in browsers – the Strangeloop Site Optimizer.

Previously, website optimization required developers with specific expertise to improve code on a page-by-page basis. This was a time-consuming and costly process.

Strangeloop's optimizer allowed performance issues to be fixed by a computer program automatically and in real time as they are encountered. The system also required no changes to the customers' original software or hardware.

Joshuaexplains that surfing an un-optimized website is like going to the grocery store and buying each item on your list separately, making dozens of trips back and forth to the checkout. If a website is not optimized, the browser has to make more trips to a server to retrieve data.

"Our software reduces the number of trips by packaging objects up. We make sure you have the right amount of each ingredient packaged properly. We reduce the number of trips, without reducing the experience."

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In July 2007, the company had a major breakthrough, securing $11.5-million in private investment. They were ready to go to market. But the market was skeptical.

THE SOLUTION

Mr. Bixby says that the early days were spent pounding the pavement and making cold calls. But when they got through the door, they had a product that went a long way to selling itself.

"We would tell a prospective client that our service would cost them nothing if it failed to help them realize a 5 per cent gain in revenue," said Mr. Bixby. But if it was successful, Strangeloop would have a new customer.

Through their cold-calling, they connected with AutoAnything, an auto parts retailer out of San Diego. Strangeloop set up the auto company's site so that, for one month, half the people visiting would get the optimized experience and half would experience the site with no change. Over the 30 days, AutoAnything's revenue from the optimized site grew by 10 per cent and Strangeloop had a new client.

From this and other early successes, the company built a strong client base. But they also cultivated a roster of advocates, ready to sing their praises.

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"We were very proactive when securing sales to cultivate our new customers into secondary spokespeople," said Joshua.This support from the corporate community was essential to helping them win new and bigger contracts.

Also essential to their success was their work promoting the importance of website optimization in the professional web community.

"We needed to generate a consensus among people in the industry that speed matters," he said . "And we needed to be seen leading the discussion."

To this end, Strangeloop produced research and white papers that were made freely available to the web development community. As momentum built in the industry toward a greater need for web optimization, the Strangeloop team had earned a reputation as thought leaders in the space.

THE RESULTS

Since 2009, Strangeloop's revenue has grown by 200 per cent quarter over quarter.

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The brothers have brought on 60 employees and have expanded their operation to Europe and Latin America, with plans for further expansion into Asia.

New customers like eBay and PayPal, Visa and Petco have implemented the company's optimization solutions to speed up their websites and enterprise applications, realizing increased sales of 13 percent.

In November 2011, Strangeloop secured a second round of major funding, receiving $10-million dollars from a group of private investors. This infusion came on the heels of the introduction of Strangeloop's new Mobile Site Optimizer – the first system to increase website speed specifically for the mobile environment.

Special to the Globe and Mail

Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.

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 Your Business website.

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