Kimathi Marangu: The Team Player
By: Lisa Picarille
Kimathi Marangu likes to do well by doing good. It's a concept he finds very appealing. He also describes himself as very passionate about performance marketing.
It's not easy to combine all those passions but Marangu has managed to strike a good balance.
Marangu is the co-founder of Mall Networks, an affiliate that builds shopping portals tailor-made for affinity organizations such as school districts, charities, sports teams and consumer associations.
The company, which was formed in 2005, already has a handful of private-label online malls. One of the most recent ones includes a fundraising mall to support Epilepsy research at epilepsy.com (http://shop.epilepsy.com). But Mall Networks isn't just about dealing with nonprofit organizations; it provides professional services as an affiliate to for-profit business including NASCAR and The Los Angeles Dodgers. For NASCAR, MallNetworks.com built the NASCAR Racepoints' Online Mall (http://emall. racepoints.nascar.com).
"A lot of our clients are strong brands with large customer bases. The bread and butter of our business is going to come from partners like NASCAR or MLB - including the Dodgers. Loyalty is important and enhances those kinds of efforts."
Maybe that's why Marangu, always the team player, notes that his two favorite sports or teams are NASCAR and the LA Dodgers.
Marangu helped start Mall Networks in mid-2005 several months after being introduced by a mutual friend to David Andre, the company's president and CEO. Andre, a performance marketing veteran, was formerly the founding chief technology officer of Upromise, one of the largest consumer loyalty programs. Prior to developing and implementing the business model for Upromise Online Shopping, he was vice president of engineering at Lycos and Direct Hit (acquired by Ask Jeeves).
The two bonded over a shared love of performance marketing, online shopping malls and the ability to provide services to organizations that didn't have the resources.
"Working in the performance marketing arena is something that I'm very comfortable with. I like working on projects that deliver measurable results."
At the time, Marangu was running his own consulting business, called Seaspray, so he had the freedom to go out and start something new when the opportunity arose. Andre's idea for Mall Networks was already in advanced discussion regarding funding by the time Marangu joined the company.
Once on board, part of the challenge for Marangu was getting buy in from merchants. "It was a little chicken and egg problem. Affiliates don't get approved by merchants without a website to point people to. Yet it was impossible to put up an online mall with merchants. It was an infinite loop we had to break through."
But Marangu's past experience and relationships he had previously established in the performance marketing and affiliate marketing space paid off. He was able to get a core group of merchants to sign on, which then led to other merchants coming on board. The company also works with the big affiliate network players including LinkShare, Performics and Commission Junction.
As of early February, Mall Networks had grown to eight employees. Marangu lives just a few miles from his Burlingame, Calif. office. But he is the sole Mall Networks' worker in the office suite. Still, he shows up every day dressed in business attire ready to tackle his workload. He could work from home, but likes the idea of going into an office.
When he isn't traveling to the company's Lexington, Mass. headquarters or other locales for business, he's up by 7 a.m. and off to the office to "track down an East Coast client." He keeps in constant communication with his team using Skype and email. He also travels to the East Coast at least once a month. Marangu thinks that being so far apart "is a crucial reason to show up physically every month" in the main office.
Fundamentals
Marangu started off his professional career with a Stanford M.B.A. in hand as an investment banker at Morgan Stanley and J.P. Morgan in New York and Australia.
"I'd taken entrepreneurship in business school. I was very interested in being an entrepreneur. I thought that investment banking provided a solid basis of understanding how businesses and business models are developed. It was great for a broad range of understanding the fundamentals."
Back in 1998, Marangu attended a reunion of business school alumni (he is the current president of the Stanford Business School Alumni Association) in Palo Alto, Calif. At that event he had an opportunity to catch up with a lot of his classmates who had joined or started Internet companies. "That time was ripe to join a venture. Many people I knew had taken the plunge," Marangu says.
Not long after that gathering he relocated from New York City to the San Francisco Bay Area and joined ShoppingList.com as Director of Business Development. ShoppingList.com is an online resource that allows shoppers to research local specials and sale items at stores close to home. Just by typing in their ZIP code, shoppers can search by product category, store or brand name. The venture is now part of ShopLocal, which is the result of a partnership by newspaper giants The Tribune Co., Knight-Ridder and Gannett Inc.
Marangu then moved on to be the General Manager of SchoolPop.com, a school fundraising company that connects schools and merchants together in a loyalty program. He was brought into the company by a former colleague who ran SchoolPop's business development and merchant relationships for the online mall.
Not unlike many online ventures of that era, the website and the business were well under way; but Marangu says, the "revenue model needed a closer look."
What he found was some good news and some bad news.
"On the good side, there was a strong metric among the consumers, high conversion rates and high order rates," Marangu says. "The bad news was that SchoolPop was not getting full credit with the merchants for delivering the shoppers. We were getting paid a basic affiliate rate and in 2001 that was, relatively speaking, a pittance. The online marketing money was still going to the big portal deals. Affiliates were the last at the table to get budget allocated to them. The commission rates were quite low and not very substantial."
Still, during his tenure, Marangu developed and deployed SchoolPop's business model, which delivered over $250 million in trackable multichannel sales to merchants, and as a result raised millions to support public and private schools in every U.S. state.
After three years, in 2003, Marangu left SchoolPop.com to form his own consulting business with clients including Apple Computer's online store, where he ran the affiliate program and helped grow it to become one of the largest in the industry. He also designed, negotiated and implemented search and comparison shopping partnerships with Google, Yahoo Shopping, BizRate/ Shopzilla, Overture, Shopping.com and PriceGrabber.
Outside Interests
But before going out on his own, Marangu took a much-deserved vacation to Africa. Continued on Page 2...
Tags:
mall networks, kimathi marangu, loyalty, rewards, ask jeeves, nascar, performance marketing, upromise, consumer loyalty programs, lycos, epilepsy research, passions, mlb, shopping malls, online shopping, emall, fundraising mall, consumer associations, shopping portals, affinity organizations, well by doing good, profit business,
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