NextPage's CEO and President, Darren Lee on Document Management

19:20 | Admin | Nov 16th, 2005 11:16pm |

I sat down with Darren Lee, NextPage CEO and President in Utah. Darren’s years of entrepreneurial experience bring him rich perspective in his field. As co-founder of Knowlix Darren has become a guru in the document market. We spoke of the many benefits of using NextPage’s document management tools. Darren enlightens us with end user scenarios. We glimpse into Darren’s forward thinking, as he shares his thoughts of NextPage’s future and the future of document management — enterprise content management market.

To check out NextPage’s free product trial go to:

Full Transcript:

Guest: Darren Lee - President and CEO of NextPage
Host: John Furrier – Founder of PodTech.net

John Furrier – Founder of PodTech.net: Welcome to the PodTech.net InfoTalk series with Darren Lee the President and CEO at NextPage here in Utah. Darren welcome to the Podcast.

Darren Lee - President and CEO of NextPage
Thanks, John.

John Furrier – Founder of PodTech.net
NextPage is a company that is big sponsor of my sight, I appreciate that. Thank you very much. Glad to be here. Let’s talk about your company that you’re running here. It’s really an innovative company, involved in a very cutting edge area around, what some people think is a boring area, document management…big enterprise companies like Document and a lot of other ones out there that make document management software. You guys are a little bit different. I talk about Web 2.0 on my program a lot about the shift to a whole new social grid. Consumers are consuming information differently. They are using the internet more in a social fabric type of way. People are more digital savvy, employees, consumers. Talk about your company and some of the things that you see and some of the big problems that you’re addressing and about your solution.

Darren Lee - President and CEO of NextPage
Where we’ve decided to focus is document management for the masses. So you said earlier, kind of a potentially boring topic of document management. It is a boring topic. So we actually came at it from a totally different approach. If you’ve followed the market at all, it is completely grown up around a very centralized approach; it is very command and control. Today what you find is that particular market sometimes categorized as the Enterprise Content Management market (or ECM) is really focused on very high end type, repeatable publishing type solutions. And they are, they’re boring. They’re typically more enterprise class style; hardly the common mans problem. Traditional one, like new drug applications or records management for your finance group. It’s just not something that the bulk of your professionals out there ever actually deal with in their day to day life. We choose to come at it from a completely different perspective, which is the end users have a massive problem of document chaos. Microsoft estimates there are about 400 million users of Microsoft Office, 20 million of those are power users. If you sit down and watch their behavior, there is probably about 6-7 billion documents created a year. As they create them, if you talk about those power users, it’s typically done in a very collaborative fashion. Most people will have experience this, you write a document, you send it out in email to 4 or 5 people. You await there feed back, they create edits, and they send them back to you. As you work through that process it very quickly becomes this chaotic pattern of where is the right version, who actually has touched this document, what did they do to this document? What changes were made and now how do I incorporate it to deliver a proposal, to deliver an agreement, or to deliver some form of a mission critical document that comes out of that organization? Traditional document managements completely failed in delivering on that particular problem, because best illustrated by an example: I met with a chief knowledge officer of one of the largest consulting firms in the world. We sat down and went through our product. He absolutely loves it. His comment back to me was, “Three years ago we spent $2.5 million on a particular document management vendor’s product. We intended to deploy it to 10 thousand users.” And he said, “Guess, how many people actually have deployed and are using it today?” I took my guess. He came back and he said, “There are twenty five people in the organization that use it. It has been an abysmal failure.” So it has a long sale cycle, it had an incredibly long deployment cycle for them. And only in the end after three years amazingly low adoption rates. The reason is it doesn’t work like they do. It’s a very, very heavy solution. At NextPage we completely reinvented the model; there is no IT required. It integrates very, very easily into the desktop. We tie it directly into your email and to Microsoft Office. The user does nothing different in the normal way in which they write documents, send documents, edit documents, review documents, proof documents. But as a very light weight service, we can track all of that, kind of like a GPS system for your documents. It knows precisely where they are, what’s changed and what’s going on. It’s changing the marketscape completely.

John Furrier – Founder of PodTech.net
So you’re saying earlier the other ways, people were projecting onto users, “Here this is the rules, you need to control this way to work.” They were being told how to work.

Darren Lee - President and CEO of NextPage
Yes, it is very mainframe PC. The mainframe was the centralized, obliviously very heavy (if you what to call it an application), and the PC just enabled the masses to do what they do. They do a spread sheet. They don’t do data processing. The same thing is happening in this marketing. I write documents. I do marketing collateral. I send a proposal to a customer. I write a memo. I do a product requirements document. I don’t do new drug applications. I don’t do massive records management types. That doesn’t mean that those things don’t matter. There is a place for them; there is a place for Mainframe even today. There is a place for that stuff. But that is not the problem of the masses. Now, if you’re going to try and address it you have to shift the model completely which we did. We came in with a completely different model. It’s light weight. You down load it, very simply. It installs in a couple of minutes, and you’re off and running.

John Furrier – Founder of PodTech.net
So this takes away the problem that users kind of solve for themselves. So they just change the name, add a JF edit or whatever or some sort of naming convention. It’s not standard. It’s someone’s own way of figuring out what you do. When documents get shared, is that how you see it too? People solve it on their own. But now with your solution that goes away? Right?

Darren Lee - President and CEO of NextPage
That’s right…any time you talk about, “Who’s the competitor in the market?” It really isn’t these high end document management vendors. Ultimately we eat away what they do over the long haul. However, today it really is a user is so used to this pain and dealing with it, that they find ways by naming it, storing it in funny places on the hard dive, calling it final version, only to have to then to call it “final final final I really mean it this time final version.” NextPage eliminates that completely for you, because again we track every single version and we know precisely how they sequence together to create the versioning of that entire document

John Furrier – Founder of PodTech.net
So give me an example of a used case of a user’s pain.

Darren Lee - President and CEO of NextPage
Great example would be to take one of our users at a consulting group. Small sized consulting firm. In their case they get a large contract to do a set of M&A activities for a large hotel chain. In doing that, they bring in twenty-five or thirty different consultants, all of whom begin generating these documents (whether it’s agreements, whether it’s proposals, whether it’s financial analysis, whatever the case may be, as they put together this deal). You’ve got attorneys in the mix. You’ve got auditors in the mix. You’ve got the consultants in the mix. You’ve got the management team in the mix on both sides of the fence. All of these people are now trying to stitch together an M&A activity. And ultimately the deliverable of that is, in fact, a document. They generate over 7,000 versions within that activity over about a 90 day period of time. It’s a big document factory. All of it was done through email; all of it was done on hard drives, etcetera. The complete confusion that takes place is incredibly costly. At the end the risk of poor quality showing up in the documents, because when you coordinate that may people that fast you’re bound to obviously have not just human error, but the error of coordination among lots of humans. That’s really a sweet spot for us.

John Furrier – Founder of PodTech.net
It’s really not an enterprise issue, it’s really more document chaos. Anytime you have more than one person working on a project where documents are generated, there is going to be chaos. Your approach is just looking at it from how people work. You mentioned email, so your product fits into how people do their job. Is that a technical thing, it is more of…your relationship with Microsoft? How does that work?

Darren Lee - President and CEO of NextPage
Well, there is a little bit of both. We do have a relationship with Microsoft, as a certified partner with them. But the way in which we solve is really is our technology, there’s really two pieces to it. One is a very simple client that gets downloaded, you install it on your machine and it gets integrated with Office. Because of that we know what’s going on with the document. We watch very carefully, every time it’s saved, and the location as to where it is saved. On top of that we have a service that we host, so think of it as a server in the sky, a document management alla sales force.com model it’s a hosted service. We never host the document for security reasons, but what we do host are a set of meta-data or pointers as to where these documents are. That’s how it can coordinate it so that you and I work in different companies but if we’re working on a document together we can actually use NextPage and I can see the versions on your machine and you can see the versions on my machine. We can coordinate that activity because of the service that gets hosted in the sky. So it works great in a cross enterprise cross border application as well.

John Furrier – Founder of PodTech.net
Let’s talk about meta-data. I think that’s a really key point. Right now in a lot of this web 2.0 everything is about meta-data. Information about information, search engines, human filtering, all the search engines, all the new stuff happening in this real-time web environment is about meta-data. You are applying meta-data to the product and then managing that for the users?

Darren Lee - President and CEO of NextPage
No, not in the way you would think that you’re describing. Our meta-data is really…think of it as a Swiss bank account number (kind of like the UPS barcode or the FedEx tracking system). We basically label the document so that we can uniquely identify it. So now when it’s traveling, we’re simply watching that particular tag which DOS has metadata embedded in the document. Now we know where the document is, who’s got it, what they’re doing with it, etcetera. We can derive a lot of interesting information for the user from that.

John Furrier – Founder of PodTech.net
This is a productivity boost for them…

Darren Lee - President and CEO of NextPage
Yes, it’s focused on the productivity boost that’s the core application of why we would track in the first place.

John Furrier – Founder of PodTech.net
So give me a user case now…one the other side. You gave one of the (cases describing) pain points. Give a user case of someone who feels no pain. So a consulting group says, “Give me the latest REV.” Do they go to your service and say, “Where is it? I don’t know what folder it’s in?” Take me through an example of a user using your product.

Darren Lee - President and CEO of NextPage
Actually a really, really simple example. We’re working with a guy who is sitting the board for a particular company. They’re divesting some assets. As we were going through the priorities, he was going through the process of creating the documentation on this transaction essentially. He was about to attach a set of documents to an email to go out to the board for approval. When he goes to attach those documents, the collaborative team that had worked on them were, obviously CFO, CEO, Chairman of the Board, outside counsel, typical auditors, etc. As he goes to attach that document to send it out traditional problem would have been you don’t know which one is the right version after that kind of activity. He goes to send it on to the board. The moment he attaches those documents he gets notified, because NextPage notices that he’s doing something really important. He is about to send some documents out. Behind the scenes, NextPage does a quick check for him as to whether or not those in fact are the most recent versions of the document. They were not. So we notified him in real time, we tell the user and say, “Guess what, these are not the most recent versions of the document, in fact, and then we name the person who has the most recent version, who happened to be the CFO.” He checks in with the CFO, and the CFO says, “I’m sorry, but I forgot to tell you, but there have been last minute edits. We had to change terms on a couple of things, the payout schedule and the price changed just a little bit.” That becomes very material to get that in the hands of the Board with the right stuff. Completely solved the problem, and saved him from that pain. One simple example, but that’s the typical stuff that we see.

John Furrier – Founder of PodTech.net
You compound that problem with the fact that without your solution someone has to be in charge of it. Basically, document management, project management, human labor, someone is responsible for phoning people up, “Did you mail me the last version?” All of that stuff goes on.

Darren Lee - President and CEO of NextPage
If you talk to…another great market for us is people who do really extensive proposals. If you talk to them typically on the team they’ll appoint somebody who is responsible for watching for out versions of documents that are going to ultimately hit the proposal. Very expensive, very human expensive, time expensive, speed expensive, quality expensive, we eliminate all of those problems.

John Furrier – Founder of PodTech.net
I’ve been using the product for awhile and I like how I get notified every time I do an attachment, so It’s really smart enough to know that I am doing an attachment. It wakes up and tells me, “You want to check for the latest version or here is the latest version.” It’s really clearly for the masses. From a customer perspective on how you’re selling it, what are your customer profiles? And how does that look when you are out actually selling it?

Darren Lee - President and CEO of NextPage
In terms of segments, the legal market does really well for us. Large sales groups where you have a negotiated agreement, think of them as customer facing documents. I mentioned proposals, agreements, statements of work, those end up being terrific markets for us. Marketing teams when they generate collateral product design requirements. In a more generic level, if it’s a document intensive process, it’s collaborative meaning you have two or more people that have to participate — that ends up being just a sweet spot for us.

John Furrier – Founder of PodTech.net
A lot of people have headaches, I do at a personal level, but I probably wouldn’t buy the product because I am just one guy. I do virtual work where I use it, but of all the people who have the headaches, which ones stand out the most in terms of the profile of the user? Is it the IT manager? Is it the marketing person? Is it the office administrator? Who’s your “major profile” that you call on and customers if they are listening maybe would identify that it’s them?

Darren Lee - President and CEO of NextPage
Typically, where we do the best is think of the VP of sales or at least a VP sales operations, because they’re responsible for how the sales team will actually interact with that customer with an agreement, in combination with corporate counsel because they weigh in on legal matters. Sometimes business development teams who get involved as well. And then finally sales engineering teams, because they have a lot of responsibility for accurately representing the sale of the product from a technical perspective than that is very document intensive to do that. They end up being terrific targets.

John Furrier – Founder of PodTech.net
This in one of the things from a business perspective, it’s a good opportunity for you guys because you don’t have to go in and do the big sale to an IT, you don’t just say, “Oh, port all of your systems to us…” You can go to someone who has decision making capability like a VP of marketing, VP of operations and say, “If you’re doing any collaborative transactional document generation you can just buy this product.”

Darren Lee - President and CEO of NextPage
Yes, they buy it. It’s a service and it seamlessly runs for them. Sometimes IT gets involved just to do a check on security. We always clear that very easily because we never host the document, so it’s always protected by them. It ends up being very short in the sales cycle.

John Furrier – Founder of PodTech.net
You’ve had a lot of experience. You’re an entrepreneur. You’ve started NextPage going back to Folio which was part of open market. Now you’ve spun that off fast, and now you have NextPage just focused on document collaboration space. You have a new product coming out in the fall, launching it at the demo conference. Where do you guys see the road map going forward in the next year or so? Download then service?

Darren Lee - President and CEO of NextPage
I think what you’re going to see in the next year from us is …we’re still at a phase where the product just gets so much investment from us. It’s probably 80% of our spend is on product investment. It’s a terrific product today, and we have an amazing road map over the next 12 months to mature it. Then we’ll really begin to put our efforts into the scale of the product. But what you’ll find is we’ll hold true to the themes of: number one, limited to no IT infrastructure required for it. Continue to work like the user does, so we don’t run into the adoption problems that larger players have run into. A price point that just makes it a no-brainer for the user to buy, and then finally, we’ll continue to just chip away at that document chaos problem because it’s huge, it is very horizontal, it crosses all kinds of segments, it crosses geographic bounders, so it represents a significant business opportunity for us. So we’re going to stay right there.

John Furrier – Founder of PodTech.net
Right now, you can have a free trial at NextPage.com. For folks out there who what to try it or want to download it, go to NextPage.com. For them, what would you have them look for? As one of our listeners downloads the trial, what would you have them look for as they use it? What would you highlight?

Darren Lee - President and CEO of NextPage
The biggest thing I’d highlight for them is they will find very, very quickly within two minutes they are up and running. One of the biggest things, we find with these users when they first try it is they say, “Does it really work, because I am just working like I always did? I don’t have to check a document in or check a document out. I don’t write all kinds of meta-data about the document to get it to someone.” They just email it, like they always did. So what they’ll find is they’ll get all the version history, the version mapping of those documents will be available to them. They will get real time awareness that pops up and shows them at any given time where the document is, what’s its status, who’s opened it, who’s reviewed it, who has not. They will find that they actually don’t do anything different other than NextPage now appears through this elegant way of notifying them of what is going on.

John Furrier – Founder of PodTech.net
That’s good stuff and you guy are going to be at the Demo fall conference which is going to be in California.

Guest: Darren Lee - President and CEO of NextPage
That’s right

John Furrier – Founder of PodTech.net
Chris Shipley’s famous DEMO conference if anyone is listening and wants to check out the DEMO conference you guys will be there. What about a big prediction in the next five years in this whole area of Web 2.0 very viral market place, your prediction?

Guest: Darren Lee - President and CEO of NextPage
I am self interest in this prediction because I really do believe this. You’re going to see a complete overhaul of what we know today as the enterprise content management market. There are so many people… there is no “e” in enterprise content management. When you peel it back, you’re seeing very high end deals, long sales cycles, long deployment cycles, and very, very small adoption. What you’re going to see in five years, you’re going to see the masses, the people on the edge who have the document problem everyday, that problem will be solved for them. From that, that will position companies, like NextPage, to then enter into the enterprise and begin solving some enterprise problems. But it’s all going to start by solving the end users day to day business problem. Then we’ll go solve problems for the enterprise not the reverse.

John Furrier – Founder of PodTech.net
You guys are really just pioneering an inevitable force which is the idea of buying software in an enterprise classic sense, its history. You guys are evolving that model in a whole other direction.

Darren Lee - President and CEO of NextPage
We’re going to completely turn it up-side down. That really came out of client server architecture days, it’s a different world. I mean, even five years ago you couldn’t reasonably download software for your own use on your professional PC. You couldn’t reasonably download that and be effective with it. Today you can. They’re selling models, marketing models, all of that needs to change. So it has to be companies like NextPage that come from a brand new paradigm, they’re going to take advantage of that.

John Furrier – Founder of PodTech.net
Very innovative on the social grid concept, and leveraging the whole shift to a Web 2.0. Great product, and can’t wait to see it at DEMO. Darren Lee, thanks for the PodCast

This entry was posted on Wednesday, November 16th, 2005 at 11:16 pm and is filed under PodTech, Enterprise 2.0, RockyMountainVoices, NextPage, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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