I met David Kalt on the sailboat docks at Belmont Harbor in the Summer of 2001. I remember it because he mentioned he had recently started a company called OptionsXpress.com and I had recently taken over as vice president of marketing for the now defunct financial data feed company, Hyperfeed Technologies. We supplied option price data to OptionsXpress.com They were an important client mostly because in the months following 9/11 they seemed to be the only company that was growing and paying their bills on time.
In the wake of 9/11 David kept his act together and focused on fundamentals that would allow his company to thrive in spite of a horrible time for trading technology. Big things were happening all around him, but David kept his eye on the little things. “A lot of little things can add up to big things,” he said, reflecting on his early days as an entrepreneur. “It was clear to me what needed to be done so I repeated the message to my staff over and over and over and over. Most entrepreneurs take their vision for granted, but unless you drive it home every day the message just won’t stick.”
The Half-Naked Trader Market
From my office at HyperFeed, I watched the home-based, underwear-donning, basement-dwelling stock day trading market disappear overnight. This was David’s chance. Option trading offered hope in a volatile market, but it was not widely understood. David knew that providing the basic tools, now matter how good, was not enough. He knew that people needed to be educated on how to use the technology and how to design trading strategies. He made sure that there was plenty of educational content on OptionsXpress.com that would allow traders to learn it, live it, and make money. It was a level of intimacy not available in the online brokerage world. He demystified option trading and made it easy enough to understand that even a neophyte like me could get a handle on the process.
Little Things That Rock
Today, David applies the same approach to the music business. He wraps the product and the technology in layers of great content that helps customers get to know the products more intimately. Visitors to the Chicago Music Exchange see first hand just how big a collection of little things can be. After he bought the iconic retail store in Chicago, he bolstered the business model by developing online sales not through price cuts, but through the generation of meaningful content. He employs social media experts, writers, videographers and, of course, musicians. When it all comes together, the results are spectacular. The recent YouTube.com video, A Brief History of Rock N’ Roll, has received almost three million views, cutting their online custom acquisition efforts by over 90%. Like with OptionsXpress.com, Chicago Music Exchange presents a level of intimacy that is uncommon for online music shops.
The investments in the little details payoff too. When OptionsXpress.com finally sold, David’s investors would learn that they earned 150 times their original investments; I’m sure hearing that was music to their ears.
You can hear more from David during his keynote speech during Technori Pitch next Tuesday – get your ticket now!
Photography: BusinessWeek