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case study

Rusty Bishop, co-founder of Red Funnel, developer of FatStax


Rusty Bishop and Mark Walker, co-founders of San Diego-based Red Funnel, developed their only product called FatStax. It's a suite of specialized applications for the iPad, which allows sales forces to replace the "fat stacks" of paper catalogues they often carry around on sales calls.

The two found early success selling their mobile replacement for the catalogues to the small and medium-sized market of sales forces.

Still, they knew their longevity and ability to raise capital relied on being able to sell it to large enterprises. But that came with a challenge: large companies came with more departments, some with multiple approval levels, and changing priorities, people and budgets. In the time it took to navigate the complex buying process, many potential sales were lost.

Mr. Bishop and Mr. Walker knew they had to make it easier for larger enterprises to become customers.


In 2010, the two came to the realization that decision-makers, busier than ever, might have lots of information available to them through the Internet, but they would only turn to it when some event triggered them into action. That trigger "is often a visit by a salesperson," Mr. Bishop says.

They saw an opportunity to produce a technology application to replace the 'fat stacks' of catalogues that sales reps carried around.

"We spent long hours brainstorming and testing product database software in field sales situations," Mr Bishop says.

It took them awhile to find the right device. Laptops had the computing power but were difficult to hold in someone's hand during one-on-one presentations. BlackBerrys were small and mobile, but had tiny screens that made it hard for customers to see and interact with product information.

Then came the iPad. It was the perfect mix of portability, power, and the right screen size."We immediately saw the potential the iPad had to impact a sales person's effectiveness, and we immediately began working on an application that sales reps could use to always have relevant information at their fingertips" Mr. Bishop says.

After a month, they had a prototype. During beta testing, they saw sales forces use it in the field. "We hopped in our cars and went on sales calls and to trade shows with reps for a period of three months, all the while improving FatStax from the feedback and observing how decision makers and influencers reacted," Mr. Bishop says.

Nine months later, FatStax for the iPad allowed salespeople to easily search through tens of thousands of individual products in seconds without an Internet connection.

As with many startups, initial sales were to small-and medium-sized businesses. That early success generated interest from larger enterprises but sales were stalled by the complexities of dealing with them.

"We knew we had to make it easier for decision makers to buy FatStax because the longer sales cycles related to selling to large enterprises was impacting our cash flows and our ability to attract capital," Mr. Bishop says.


The solution rested on minimizing the involvement of the companies' IT departments and making it easier for everyone else to justify a decision to deploy FatStax.

To make it easier for larger companies to justify a purchase, Mr. Bishop and Mr. Walker put together pilot programs, offering organizations a three-month period for as little as $750 to use FatStax on the  iPads that some of their sales people purchased themselves and were bringing to work.

At the same time, they offered analytics that would help prove the value of FatStax.

"The pilot came with analytics which allowed decision makers to see that using FatStax allowed sales people to spend up to 25 per cent more time with customers and a lot less time on the administrative component of their job," Mr. Bishop says.

This increase in sales effectiveness came because FatStax could be integrated with a variety of customer relationshiop management and content management systems, allowing sales reps to email collateral material to customers on the spot and automatically push that sales activity directly into their CRM systems.

To minimize the involvement of IT departments, they also created a team of content management experts who worked with potential customers to simplify the creation of the content needed for the catalogues.

The added benefit of that team was that it also helped to build pilot catalogues, typically in under a week, so that sales reps could quickly use the tools and generate the analytics needed to convince decision-makers.


The inexpensive pilot programs and reduction of IT involvement helped allow decision makers to quickly see the benefits of using FatStax on iPads and, thus made it easier to approve purchases.

"A recent customer reported that 42 per cent of its users generated a sale within 48 hours of emailing product information from the FatStax app" Dr. Bishop says.

Now, a significant percentage of the company's revenue comes from larger customers. The company now delivers information on more than 600,000 products to customers in more than 50 countries.

That has helped to accelerate the company's growth and attract angel investors to provide the capital needed to enhance marketing efforts, build out its sales team and help fund the recent release of the next generation of FatStax.

Craig Elias is the founder of Shift Selling Inc. and an entrepreneurship instructor at the Haskayne School of Businessat the University of Calgary.

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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