MES LEECH - INFOCAST CORPORATION (IFCC)
CEO Interview - published 12/11/2000
DOCUMENT # LAG625
JAMES W. LEECH, is President, Chief Executive Officer and Director of
InfoCast Corporation. Mr. Leech is a seasoned senior executive with a
26-year track record of building publicly owned companies in high
technology and other sectors. Mr. Leech most recently served as Vice
Chairman of Kasten Chase Applied Research Ltd., a data security and
networking firm. There he staged a successful corporate turnaround and
merged Disys Corporation, a high technology communication firm, into
Kasten Chase. Earlier in his career, Mr. Leech served as President of
Unicorp Canada, a financial services firm, building its assets from $50
million (Canadian) to $6 billion (Canadian) in five years. Subsequently,
as President and CEO of Union Energy, Inc., he directed a growth
strategy that took assets from $1.6 billion to $2.7 billion and
culminated in a merger of the company into Westcoast Energy Inc., a $750
(Canadian) million transaction. Mr. Leech graduated with honors in Math
and Physics from the Royal Military College of Canada, and holds an MBA
from Queen's University, where he is the current chair of the Queen's
School of Business Advisory Council.
Sector: application software
TWST: Could we start out with a history and a quick overview of
InfoCast?
Mr. Leech: InfoCast started about a year and a half ago. Today, we are a
public company listed on the Bulletin Board. We have established
ourselves as a leading e-enabling service provider with unique product
offerings in the customer care and employee/partner empowerment areas,
which places InfoCast in a class of its own. Our offerings are: Contact,
which is a virtual multimedia call center application; Community, which
is a fully interactive online community for affinity groups; and e-
Learning, which is an online training offering. We deliver these
applications in a service provider model, i.e., we provide the complete
infrastructure ' that is the software, the hardware, and the
connectivity, for the customer, who pays on a per use basis.
Accordingly, it's extremely cost effective. Basically, what we're doing
is addressing the need of many organizations to have a solution that
provides a cost-effective way of improving their efficiency, without
having the challenge of implementing new technology.
TWST: Typically, who are the customers for these products?
Mr. Leech: There are really two target areas. For our Contact solution,
we focus on the call center market, both outsourced call centers, and
corporations who run their own centers. Almost every business now
requires a call center. I believe there are approximately 90,000 call
centers across the United States at the present time and they're all
growing dramatically. That represents one vertical target market.
InfoCast Community does target affinity groups but we are focused mainly
on multi-level marketing organizations.
TWST: If we go back and look at the call center marketplace, who are you
competing with there?
Mr. Leech: At the present time, we are not aware of anyone who's
providing call center infrastructure technology in a service provider
model. There are some companies out there that provide various
components, but nobody that we've been able to identify who really has
been able to pull it all together and provide a complete solution. We
are the only one who provides a traditional call center with the ability
to move to a complete multi-media call center. Our technology allows
call centers to handle Web, e-mail, text chat, and push technology. Our
solution also addresses staffing problems by turning the call center
into a virtual call center, and providing agents with the freedom to
work from anywhere. We provide the technology, not the people.
TWST: If the companies didn't come to you, would they have to do it
themselves?
Mr. Leech: That's correct. They would have go the traditional legacy
route of voice calls with switches that they can get from the major
switch providers. We provide a total technology package that combines
the best in voice and data technology. Our solution features voiceover
Internet Protocol or VOIP technology and traditional data line service
making it extremely reliable. The InfoCast Contact solution has
simplified the Web-enabling process for traditional bricks-and-mortar
call centers by creating a truly turnkey implementation process that
only requires a data line.
TWST: Given the size of this market, what are the barriers to keeping
some of the big players out?
Mr. Leech: Presently, the big players are tied to their traditional
legacy voice solutions. Some of them are looking at using voiceover IP
and integrating it into their legacy solution but they haven't yet been
able to implement the technology. Our strategy is to align ourselves
with some of the major channels. We are currently working with telcos to
create channels of distribution. Our Contact solution would then be
offered as a telco's solution, but would still be identified with the
InfoCast brand. The main barrier any technology company faces is staying
ahead of the marketplace. Our strategic partners have identified
InfoCast's solutions as being at least six months ahead of the
competition. Our goal is to maintain our positioning and always stay
ahead of our competition.
TWST: As you look at this marketplace, what do you see going on?
Mr. Leech: There are a number of challenges that are facing companies in
all industries. First, companies are looking to adapt and exploit e-
commerce and the Internet. They are having difficulty trying to
determine the best way to utilize this technology. Many companies are
finding that development of the required infrastructure can be very
expensive. Unfortunately, most companies are learning that mistakes are
even more costly. By using our service provider model, we substantially
reduce the risk by providing the required infrastructure through a pay-
per-use basis. The customer only has to provide the connection and we
provide everything else in a cost-effective manner. There are 90,000
call centers in North America, and over the next few years,
approximately half of them are going to be required to provide multi-
media customer service. Presently, only about 1% has this capability. In
the next few years, there is going to be a tremendous push to Web-enable
call centers. Second, the call center industry is growing dramatically
due to the incredible influence of the Internet and the growth of e-
commerce. Companies are being forced to incorporate call centers into
their business in order to compete in the new Web-enabled economy.
Third, traditional bricks-and-mortar call centers are faced with the
realization that using three, eight-hour shifts, to answer telephone
calls with peaks and valleys in telephone call patterns, just isn't
effective. Also, agent turnover is dramatic in the call center industry,
averaging about 35% to 40% a year. Most companies cannot afford high
turnover, especially when it costs $25,000 to train one new agent. By
using InfoCast Contact technology, companies have the ability to create
a virtual contact center. The virtual contact center permits agents to
work from their home or other satellite offices, decreasing overhead
costs and encouraging agent retention. InfoCast Community, the division
of InfoCast targeted at affinity groups, has developed communication and
productivity solutions for multilevel marketers. There are about 27
million network marketers around the world representing a $90 billion
business. In the United States, there are approximately 800 companies in
the network marketing industry, with over 50,000 to 100,000
distributors. Their main challenge is taking the traditional multi-level
marketing model and adapting it to the Internet. These groups are always
looking for ways to improve communication and to keep their multi-level
organization motivated and functioning. The InfoCast Community solution
is an interactive technology portal that provides multi-level marketers
with the ability to effectively communicate their message.
TWST: Who would some of the customers be in that space?
Mr. Leech: Our lead customer, an organization called Britt Worldwide, is
comprised of approximately 1.2 million distributors in the Amway multi-
level marketing organization. As our lead partner, we have designed the
portal around their requirements. Our focus is to now offer the
technology to similar organizations. This solution offers full Internet
service, a customized gateway to the Web, and private communities
designed for communication, recruiting, product information and sales
techniques. It also provides the opportunity for electronic commerce
enabling the purchase of goods and services. Finally, we anticipate that
our distance learning application will be offered as an addition to the
InfoCast Community solution.
TWST: What were they doing before they moved to your solution?
Mr. Leech: Multi-level marketing businesses were spending a considerable
amount of time attending meetings, usually once a week, to gather with
other people in the same down line to facilitate recruitment and to talk
about sales techniques, hot products etc. The head of a down line would
be required to spend time traveling from city to city, renting a room in
a hotel, and paying the hotel for lousy coffee and doughnuts just to
have one meeting. Using our Community solution, meetings take place
online saving both time and money. It still provides the same
functionality as a traditional meeting, allowing the participants to
chat with each other through bulletin boards and chat rooms, but without
the extra expense of hotels etc.
TWST: What kind of growth can you see in this ASP business over the next
couple of years?
Mr. Leech: Actually, we are not a traditional ASP but rather an e-
enabling service provider. We e-enable organizations with productivity
solutions offered through the ASP model. InfoCast has now completed the
research and development phase and our products are now customer-ready.
We are executing our sales strategy and are starting to generate revenue
through InfoCast Community and InfoCast e-Learning, which is an online
education and training application. InfoCast Contact should be marketed,
through a major channel, within the next two months.
TWST: What is going to be the strategy to get the product into the
marketplace?
Mr. Leech: Our overall corporate strategy has been to create unique
solutions. With our solutions in place, we have been able to establish
some very significant partnerships. We have three partnerships that we
will leverage in the execution phase. Our first partner is Sun
Microsystems, and they are not only a partner but also an investor in
InfoCast. They are also an equipment supplier, a channel to market, and
a reference for clients. We have established ourselves as an Elite
Provider under their Service Provider.com Program, one of the few
companies that have achieved that level. Sun has been an integral
component of our growth and will continue to be a driving force in our
future success. AT&T has been our network provider, our connectivity,
and a major strategic partner for InfoCast Contact. We have been working
with AT&T to develop partnered sales channels, and are ready to sell
alongside of them. Finally, Computer Associates, a leading global
software provider, helps us by supplying customized software. With our
strategic partnerships in place, we are ready to enter the marketplace.
TWST: Will you be doing your own sales or will it be through the
partnerships?
Mr. Leech: Actually we will use a combination of sales strategies. For
example, InfoCast Community prospects respond best to direct selling
using a viral sales approach. Affinity groups, such as multi-level
marketing groups, religious or, university educational organizations,
are the perfect model for top-level selling. The sale is driven down the
organization through viral marketing. This sales style is extremely cost
effective because it doesn't require a large sales force. The Contact
and e-Learning strategy is to use a combination of direct selling and
channels through partnerships. Channels will become increasingly
important as our products continue to grow.
TWST: What are you doing in distance learning?
Mr. Leech: Our distance learning offering is focused on online training.
We have approximately 1,000 adaptive courses that we have obtained
through the development of strategic partnerships with top course
developers. InfoCast is not in the content creation business; rather,
we're in the content delivery business. Our main focus is on call
centers and affinity groups. Our goal is to offer online training as a
value-add for both InfoCast Contact and InfoCast Community.
TWST: What is it that's proprietary about what you're doing?
Mr. Leech: The proprietary component of our e-Learning product is the
delivery engine that we've developed called the Learning Management
System. The system acts as a Registrar's Office by verifying course
eligibility; it creates the desired curriculum schedule; it sends
electronic invoices; and it reports student progress to the course
supervisor. Our technology delivers the supplied content.
TWST: What should investors expect from the company in terms of growth
over the next two or three years?
Mr. Leech: With our products ready to go to market, our focus is on
generating revenue. We've assembled an experienced management team,
we've formed our key strategic alliances, and we've developed unique
core applications, which have exceptional market potential. With
everything now in place, investors will see an emphasis on revenue
generation. For example, in the last few weeks, we've signed contracts
with new customers, generating revenues in excess of $2.5 million. Our
emphasis is on pursuing new customers and continuing our revenue growth.
TWST: What should investors be looking for?
Mr. Leech: Watch for announcements of contract signings, channel
developments, and growth within the Community and Contact divisions.
TWST: Do you have all the tools that you need now or will you be looking
for acquisitions to fill things out?
Mr. Leech: Our present plan does not include any future acquisitions.
Our divisions all work together to provide a complete offering. We will
be focused on leveraging our partnerships, which are very strong.
Fortunately, we have the financial and market backing of Sun
Microsystems, a strong relationship with AT&T, and a partnership with
Computer Associates. Together these relationships provide us with many
resources and help to position us strategically in the corporate
marketplace.
TWST: How did those partnerships come about?
Mr. Leech: Basically, the management team has been developing
relationships with these companies throughout their careers. We have a
strong management team, and they have each had very successful careers
in building businesses or in marketing areas of service providing, call
centers and affinity groups. Each of our team members are well known in
their industries, especially to companies like Sun, AT&T, and CA. They
view InfoCast as an efficient channel to get their business services and
products into the markets we target.
TWST: Do you have the financial wherewithal that you need?
Mr. Leech: We've recently raised additional capital. In this industry,
it is important to be always looking for additional sources of capital.
The recent investment by Sun Microsystems was of major assistance. We
have plans over the next three to six months to raise additional
capital, as well as move the company to a major stock exchange.
TWST: Does the recent shakeout that has started in the whole dot-com
world have any negative implications for you?
Mr. Leech: It has. Our stock was not been immune to the shakeout, which
has been painful. However, we believe we've been able to work through
this period and make significant progress, especially in the area of
product development and product-to-market strategy.
TWST: How about from a business aspect?
Mr. Leech: From a business aspect, we haven't been directly affected.
Our business plan wasn't predicated on selling our products to start-up
dot-coms.
TWST: Does the market have a clear understanding of what you're doing?
Mr. Leech: One of our goals over the next few months is to distinguish
InfoCast as an e-enabler, not a basic ASP.
TWST: When investors look at the company, where is the big risk at this
point? What do you really worry about?
Mr. Leech: The largest risk factor facing companies in this industry is
speed to market, and market penetration. With the partnerships that
InfoCast has built and the target market we have been focusing on, we
are prepared to penetrate the market at a much quicker pace than any
other competitor. The flexible design of our technology allows us to
make changes quickly and efficiently, if required. As a result, we are
not dependent on any one technology providing us with the freedom to
replace it with whatever is new on the market.
TWST: If you were sitting down with some potential longer term investors
today, what two or three reasons would you give them to go out and buy
your stock?
Mr. Leech: I believe the most important reason to invest in InfoCast is
our experienced management team. We have brought together a group of
people who know this business, and who have a track record of building
very successful public companies. Second, I would highlight our key
strategic alliances. This is what really differentiates us from our
competition. Third, I would focus on our unique core applications and
the exceptional market potential for these applications. Combined, these
are the three key ingredients that will make InfoCast a successful
public company.
TWST: Thank you. (TM)
JAMES W. LEECH
Director, President & CEO
InfoCast Corporation
1 Richmond Street West
Suite 902
Toronto, ON M5H 3W4
CANADA
(416) 867-1681
(416) 867-1679 - FAX
www.infocast-corp.com
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