Thursday, April 29, 1999 at 1 p.m.

Welcome to The Download – Live. I'm your host, Shannon Henry. My guest today was Susan Williams DeFife (below, left), chief executive of Womenconnect.com, a Web site for professional women.

She took questions on:

• How she acquired her venture capital.
  
• What she perceives women are looking for online.
  
• The success and future of her womenconnect.com Web site.

Shannon Henry: Hi, welcome to Download Live. We've got Susan DeFife of Womenconnect.com on for the next hour, so send your questions now!

Shannon Henry: Hi Susan. Could you start off by explaining the philosophy of Womenconnect.com? Why target professional women and women business owners in particular?

Susan DeFife: WomenCONNECT.com was founded to fill a huge gap online...relevant information for professional women and women business owners. All of the other women's sites seemed to (and still seem to) focus on parents, entertainment, gossip, fashion, or younger women...all very important and valid audiences. Our focus is unique...we still have the market to ourselves and it is the most economically powerful of the women's demographics.

Ft.Myer Heights, VA: How do you measure your success -- traffic? revenue? What are those numbers at?

Susan DeFife: Traffic and revenue are the prime measures. Interestingly, though, revenue is not the overriding concern for Internet firms (a little counterintuitive to investors)! The main focus is to build the traffic and brand as fast and large as you can.

Shannon Henry: How is Womenconnect.com different from other women's sites like Oxygen, iVillage, etc.? Is there room for all or a chance to link them together?

Susan DeFife: Oxygen is focused on an 18-34 demographic, mostly entertainment oriented, and will move to the teen market next.

IVillage is focused primarily on parents and mostly on chats and bulletin boards.

women.com is also in the 18-34 demographic and more entertainment based.

Our audience is 30-50, one third are women business owners and another 50 percent are professional women. They're not looking for entertainment, but rather business and career information, discussions, interactive tools, and products and services. That's what we provide.

You might see links in the future...right now the landscape is very competitive and everyone is trying to carve out their place and their partners. Wouldn't look for it immediately.

Rosslyn Hts., VA: What do you think about iVillage and its IPO and do you see your company going the same route?

Susan DeFife: The iVillage IPO was a great spotlight on the women's market. Again, because we're so different, that was a positive for us. We've had a number of investors call us when they saw the valuation on iVillage!

We never close any doors...exit could be in the form of an acquisition or merger but also an IPO.

Herndon, VA: I've recently registered for WomenCONNECT.com, so I'm quite new to your community. But here's something I would really like to see on the site...one-on-one business or career advice for women, either from your staff or affiliated experts. -I'd even be willing to pay for it!- Is that something you would ever consider offering?

Susan DeFife: Glad to hear it! We are exploring these options. One of the things we're working on is differentiating ourselves from the standpoint of products and services. You might see these things in the future.

Please email me with specific types of services...sdefife@womenconnect.com. The feedback of the audience is key in developing these services.

Arlington, VA: Your WomenConnect.com concept is spot on. How can one invest in your company right now?

Susan DeFife: Nice question! Smaller investors will have to wait for any potential IPO. VC's are welcome!

Arlington, VA: Susan: Personally, I'm totally overwhelmed by the sheer volume of great information online. Even on your site, which I visit regularly, I find it difficult to drill down on one particular thing--I'll read an article about mutual funds, which will contain a link to another article, which features a link to another site, and so on. I know this is an information-driven society, but I think it's too much.

Susan DeFife: That's one of the problems of the Internet -- particularly for professional women who are especially time-pressed. We've tried to bring the best information, tools, etc. to our site in an easy to navigate fashion. However, as we get larger, it's been more difficult to navigate. Watch for a new design that will break the most popular areas into "tracks" and there will be less linking off of the site. (For a preview, stop in May 4th to see our new "Your Money" area.)

Shannon Henry: How did you raise your venture capital? What lessons did you learn?

Susan DeFife: The hard way! (One of my investors, John Burton, says you have to be prepared to bleed. Bring your band-aids.)

It was tougher a couple of years ago...very few angel investors (who were publicly known to a large group, at least) and no funds that did seed capital.

We finally found a couple of angels and, at the same time, Mid-Atlantic Venture Funds moved into the area. They really do seed stage and we were able to get funding from them and four angels eventually.

It's really a learning process ... one in which you learn how to find the investors, how to talk to them, and how to get the plan right. (You're always adjusting to what you learn.) The most important thing is not to get discouraged. I was told "no" more than twenty times and just as I started to get discouraged, I read an article about a guy who said he's been told "no" 42 times before getting to "yes." I figured I had 20 more "no's" to go! We made it long before then.

Shannon Henry: I hear all the time that venture capitalists tend to be reticent to invest in Internet content companies. Obviously, your company is an exception. Is that attitude changing?

Susan DeFife: It's kind of cyclical. When we first started out, it was a problem. Content companies did not do well as fast as investors had hoped. When they realized they were in for a longer haul, they shied away from companies like us. We put the emphasis on community and when community (mixed with commerce) came into vogue, we were right there.

Interesting thing now is the shift back to content...portals are looking to the "stickiness" factor in attracting users. So, even though we haven't changed, the view of us constantly does.

Memphis, TN: Hi Susan. I think your site is great! I'm curious what your plans are for the future with iVillage getting so much attention in its recent IPO.

Susan DeFife: We keep the doors open and the IPO market is certainly an option.

Alexandria, VA: Can you tell us about the chats WCC does?

Susan DeFife: The chats tend to focus on business and career issues. We've had a chat with venture capitalist Ann Winblad (who drew over 80 people) and with procurement experts from the federal government and a Fortune 500 company talking about procurement issues for small businesses. (Another record-breaker for us with more than 85 people.)

Yesterday, we had a home office expert. All of the chat transcripts are archived on our site so take a look.

Shannon Henry: How do women use the Internet differently than men do?

Susan DeFife: Women are looking for relevant content...in an easy to find format and that is contextual. For example, we mix content with interactive tools and discussions in one place. If you're looking for an article on career transitions, you can find that in the career area, along with a career assessment tool to help you determine which careers might be right for you, then you can talk with a career coach. Next, you might search our job area and if you don't immediately see a job you're interested in, you can enter a "personal search agent" which will send you an email when a job meeting your description is posted.

By pulling all of this together in one area, it makes it easier and faster for time-pressed women to use it.

Also, communication and networking is high-up on the list. Technology is a tool for women, not a toy.

Shannon Henry: What are the most popular parts of your site, those issues or features that people keep coming back to?

Susan DeFife: 70 percent of our traffic goes to the business and career areas of our site. Next is personal finance or "Your Money."

The career search is one of the most popular tools.

Shannon Henry: How are you making money? Can you explain your advertising/partnership model?

Susan DeFife: Revenue model is focused on advertising and transactions. We expect about half of the revenue to come from advertising and half from sales of products and services.

We are making money...we're just not profitable yet!

Washington, DC: As a woman-owned biz, I look for tools to help me run my biz. Do you have these on your site?

Susan DeFife: Yes...within our Business area we create a great deal of content on running your business -- whether you're at home or growing a larger company. In addition, there are discussion groups which take place to provide support, networking, advice, etc.

There's also a women's business directory for women-owned companies can list themselves (free of charge). And, of course, products and services to make your job easier.

New York, NY: Do women have an opportunity to buy products on your site, and if so what are they buying.

Susan DeFife: Interestingly, the largest product sale categories have been consumer-based: books, flowers, toys. We believe there is a large market out there for business products and services and are putting more of those programs into place.

In addition, we're looking to put incentive programs into place that will encourage women to buy from us rather than somewhere else.

Shannon Henry: From audience feedback, what are you finding are the main challenges women face today? My friends (late 20s, early 30s)can't talk enough about managing a career and a family at the same time. (Stay tuned after this chat, coincidentally, for the founder of Moms Online on Linton Weeks' show).

Susan DeFife: I think it still is managing home and work which means different challenges at different times -- infants to teens require different kinds of stress and effort! My kids are teen-agers so there's no day care rush and they are able to do a lot of things for themselves. But I see more men taking on this responsibility. It may not be perfect, but it's getting better. And I spend much less time caring about whether the dishes are finished or the beds made in the morning!

Washington, DC: Susan, based on feedback from your users, what would you say are some of the top concerns-issues of businesswomen these days?

Susan DeFife: For professional women: career transition. In a recent survey on our site, 70 percent of our audience said they were planning a career transition during the year. We were amazed by that number. So we've done more to address the issue of career transition.

For women business owners: it is still without question access to capital. Less than 2% of the $10 Billion in venture capital money out there goes to women owned businesses. This is not a discrimination issue, but rather one in which women don't know how/where to reach investors or the "language" they need to speak with investors. We provide information on this as well...but look to provide much more in the future.

Silver Spring, MD and : How long has womenconnect.com
been around and how many employees do you have now versus when you started?

Susan DeFife: We're up to 18 -- will be at 21 by end of May. There were four people initially, then dropped to one when the others had to make a real living. I kept it going for a couple of years until I decided I was making a great part-time income for 60 hours of work a week. Decided to build it from there with venture capital. One became two, and then we were five within a few months of raising the money in the spring of 1996. (Five people in my 300 square foot sunroom!)

Shannon Henry: How does that incentive program work? When will it be up?

Susan DeFife: Program will provide points or air miles which can be used for products/services. Look for something in the next 30-60 days.

Shannon Henry: What's the most difficult part of your job right now? What would the answer have been several years ago when you were a start-up working out of your sunroom at home?

Susan DeFife: You know, I'm not sure it's changed a lot -- we're still focused on keeping the investment/cash flow on a positive level! And building the traffic and revenue. The difference is we're in a different position, the industry is in a different position, and the trends/technology are constantly changing so you have to adapt and be light on your feet.

It's a challenge, but it's an incredibly exciting place to be.

Alexandria, VA: What advice would you give to someone who has an idea for an internet business, but doesn't know where or how to get started?

Susan DeFife: The best program I've seen is the Netpreneur program founded by Mario Morino (a very successful entrepreneur!). They have monthly programs for netpreneurs (Internet entrepreneurs) that give a lot of food for thought, useful information, voices of experience, networking opportunities, and contacts. Find them at www.netpreneur.org.

Temple Hills, MD: What types of employees do you have? What types of employees are you looking for?

Susan DeFife: We have "teams" -- content and community, sales, technology for example. I think it's important to note it's the people, not the technology that are most important. And while we have great technology, it takes people to make it work in a way that builds community.

Content and community skills include writers and community builders who interact with the community and host boards/chats.

Sales focus on advertising, ecommerce partner relationships and affinity partnerships.

Technology brings it all together!

We're always looking for more of these skills! We'll also be looking for direct marketing people...to help us mine the data base and determine who the most likely buyers are on our site.

Washington, DC: Does your site have any connection with women's organizations?

Susan DeFife: Yes, we work closely with a number of professional and women business owner organizations providing them with visibility to a larger audience. Right now, we're working with a number of them to provide additional content to our audience and syndicating that content along with our own original content.

Shannon Henry: Back for a minute to access to venture capital - how would you suggest women find those sources and learn the VC "language"?

Susan DeFife: Look for events where you might run into these investors...the tech community has a number of them. The Netpreneur program, Northern Virginia Technology Council, and other major events. Also, look for the venture fairs (the Mid Atlantic Venture Fair is an excellent example) where they could present, or at least exhibit and network.
Look at the angel networks (like Private Investor Network or Capital Investors Group) and see if you can get some time there.

Most important, find someone with "been there done that" experience to work with you on this. You're really looking for someone who knows exactly what you're likely to face and who will be really tough on you. You'll be well prepared to face any investor once you've been through this process. There's a language and a process...it's not just about your product. What is your product? Who's your market? How will you get your product to market? What's your competition (and don't say you don't have any!)? What's your exit strategy? What's the potential ROI (return on investment)? It's an educational process first.

Rocville, MD: hello from a Madeira parent.
Are you planning to have a WEB site for teen girls?

Susan DeFife: Not at this time...although I really support education for girls (as you know). We are looking at the college market to help provide opportunities for women at the college level who will become our audience. There's a need, but one thing at a time for us.

Washington, DC: What are your favorite periodicals? Which have been most helpful to you as you've grown your business? And any favorite books-authors?

Susan DeFife: Favorite book: Netgain...a must read for anyone building an online community.

I primarily read the business and trade pubs (Washington Post, Fortune, Internet World, etc.)

Washington, DC: What was your biggest success thus far for the company?

Susan DeFife: A just initiated partnership with Lycos and a soon-to-be announced network TV partnership (coming May 4).

Arlington, VA: As the CEO of an Internet company, how much do you have to understand the technology to run the business?

Susan DeFife: You have to understand what it can do (not how it works). Can it help you better deliver content and community? Can it help you target buyers by personal interest? I like to encourage a "what if" of "can we do" kind of questioning. The tech team can tell us whether the technology exists or if we have to tweak it to make it work.

Alexandria, VA: What web sites do you find yourself going to the most as a busy woman professional? What kind of information are you looking for on the web?

Susan DeFife: I'm looking mostly for news...I spend the most time on sites like CNNfn, MSNBC, personalized sites like My Yahoo. In that sense, I'm very much like my audience, give me relevant information, the way I want it, quickly.

Washington, DC: As an executive running a
business what are the mgmt
challenges you face as you
grow? Do you find you still
have to be involved in all
decision-making?

Susan DeFife: We're growing through these issues. I try to do more of the visionary guidance...and I do think it's important to be involved in the process, though much less into the nitty gritty. Big challenge in growing from 5 to 10 people and moving to office space. Those who were here early on had to adjust to the structure imposed by offices and doors.

Held a team meeting recently where, for the first time, I listed the number one priority, then listed five more after and said it was up to the team to determine the best way to get the next five done. (That was a first!)

Also, met an employee last week who was on the job and not even interview by me, also a first.

It's an adjustment, but you work through it.

Reston, VA: Privacy is a big issue, how do you get people to give you personal demographic info and how do you use that info?

Susan DeFife: We gather demographic information but only use that internally to determine characteristics of our audience. We will also use it to target specific products/services/ads to the audience, but those targeted solicitations will come from us. We do not and will not share/sell that information with/to anyone else. We ask our users for permission to tell them about products and services that fit their profile and 90% say they would be interested in hearing from us. They trust us and we will maintain the strictest of privacy and security to keep that trust.

Fairfax, Virginia: You mentioned a possible IPO. Can you give a rough timeframe in which this might happen?

Susan DeFife: Too many factors here to give an answer.

Memphis, TN: Susan, what do you think is the biggest challenge facing womenCONNECT.com in the coming years and how will you resolve it?

Susan DeFife: Biggest challenge is keeping up with the changes in the Internet and the audience's capabilities/needs. Because we stay in close contact with the audience and we have the technology to analyze what they're doing on the site, I'm confident we can meet those needs in a timely fashion.

The changes on the Internet are unpredictable and fast...however, we are a small enough company with a lot of energy and enthusiasm that we can move very quickly. For the most part, the changes have been good for us and have given us a boost (i.e. the new interest in quality content from sites like ours which give us major visibility on highly trafficked sites). But there is always the possibility of a negative (and fast) change in trends.

Shannon Henry: What have you learned about web site design? It seems to me that many sites are just too complicated.

Susan DeFife: Keep is as simple as you can....not too many heavy graphics, pull the relevant information to the top (so users will want to drill down) and build a context (content, community, commerce) to help the audience get everything they need in one visit.

Manassas, VA: When all is said and done, what do you want the final word or thoughts to be about womenconnect.com? What do you want it to be remembered for?

Susan DeFife: I want it to be remembered as a site that respected the intelligence of its audience, created a powerful community that enhanced the lives of its audience, and which provided new opportunities. I also hope it is one of the most successful Internet companies...one which shows that you can make money online!

Shannon Henry: Thanks everyone for joining us today. And thanks Susan for the insight into Womenconnect.com. We'll be watching. See you all in two weeks when my guest will be PSINet chairman Bill Schrader.