A company named for a driving transgression is now on the road to high-tech success.
When the car he was travelling in ran a red light, it prompted entrepreneur Ben Northrop to come up with a catchy name for a company.
He filed the idea away and, years later, when he and a mate set up a mobile marketing firm, they christened it Run the
Red.
The 12-year-old company develops software and solutions for messaging (text and multi-media messaging), mobile internet and mobile application campaigns and services, such as voting, competitions and donations.
It processes more than 100 million messages a year and clients include Kiwibank, Vodafone, Pepsi and Shell.
The company turned over $3 million last year, employs 15 staff and has offices in Auckland, Wellington and Los Angeles. It has won numerous awards, including a digital Emmy for its work on the TVNZ interactive online drama Reservoir Hill.
That success comes from hard work and persistence, says Northrop, the chief executive. A bit of successful crystal ball-gazing helped too.
"We were in the right space at the right time. We thought mobile would be big, because the internet was big. It's like surfing, it depends on where you are and how prepared you are for the next wave."
Northrop, 35, and business partners Justin Boersma, 37, and Deborah Crowe, 40, also share a generous helping of business and marketing nous. Run the Red charges licence and support fees on its applications, as well as taking a share of the revenue.
Far from being the "kooky" marketing ploy of its early days, mobile marketing is now part of day-to-day life for many companies, says Northrop. And the key to it is in understanding how consumers want to interact with companies via their phones.
Whether it's mobile banking, signing up to receive coupons, taking part in competitions or receiving subscriber information such as stock alerts, relevance and personalisation are essential, says Northrop.
"The consumer wants choice on how and what they engage with, [be it] a brand or a company or a service. And if the business doesn't respect that, it will lose customers."
Run the Red has also developed technology to offer customer relationship management services, giving higher volume and steadier business than the peaks and troughs of one-off marketing campaigns.
Northrop, Boersma, Crowe and Jeremy Buckley, who now runs his own software company, set up Run the Red in 1999. The tech bubble was showing signs of bursting and they reckoned mobile was the way to go. They taught themselves to program and won an award for a WAP (wireless application protocol)-based application. Unfortunately, Telecom and Vodafone were more interested in messaging as a marketing tool, so overnight the group rewrote their business plan based on messaging. The phone companies liked what they saw and Run the Red was in business.
A turning point came when the company's America's Cup support campaign for Telecom mobile users processed a previously unheard of million-plus messages. That success sparked interest from leading brands and ad agencies.
It was not all plain sailing. The company was self-funded, and for a few years its owners paid themselves only when they could. In 2003, several hundred thousand dollars from angel investors helped fund the first phase of development for the firm's original mobile platform.
In 2007, the group set its sights on Brazil. But that market proved too tough for the small Kiwi firm, which was also trying to support its Auckland, Wellington and Sydney offices, and after two years, they cut their losses.
"We were typical Kiwis trying to make it work but without enough [financial] support," says Northrop.
They applied the lessons learned from Brazil to tackle the United States market, teaming with Tennessee email marketing company Emma Inc, which wanted to expand into mobile marketing. So far it's a perfect marriage, says Northrop, and Emma Inc's investment, with funding from the Ministry of Science and Innovation, has enabled Run the Red to build its own technology platform that consolidates features of the original software, and supports features for the company's new customer relationship management offering.
After years of being a jack-of-all-trades, it's a relief to have found a niche, says Northrop.
"In the past, we've suffered from leaping at all opportunities, going for the short-term gain but long-term pain where you're tied up for six months on a campaign that you might not be able to use again."
And, says Northrop, margins have significantly improved thanks to the new business service focus.
"These days, we're doing things that can be used 10 or a 100 times over which is where money comes from. New Zealand businesses are fantastic at innovation, but often not so good at generating revenue by reselling them and getting the margins. We are."
