Snickelways Interactive: Empowering the Supply Chain

During the Middle Ages, the word 'snickelways' was used to describe a bartering grounds--an informal exchange where buyers and sellers of goods came together to do their business. Today, the name describes an Internet professional services firm, Snickelways Interactive, whose goal is to leverage Web technology to help clients do pretty much the same thing.

Founded nearly seven years ago by a group of retail-savvy executives who saw what they considered a huge opportunity in emerging technologies, like Web design and interactive TV, the firm was set up to help companies build 'interactive' digital businesses. During the past couple of years, it has served key customers like Chase Manhattan Mortgage Corp., Fruit of the Loom, iVillage, Microsoft, Musicspace.com and The Vitamin Shoppe.

Under the direction of co-founder Paul Cimino, the firm has grown to become a 150-person business that closed its fiscal year 2000 with $14 million in revenue. That's up from $8 million in 1999 and $2.4 million in 1998. Now Snickelways is ready to take its evolution a few steps further.

Cimino has moved aside to become company chairman and in June brought in new leadership in the form of president and CEO Hank Satterthwaite, a former Gartner Group vice president who grew that company's consulting services into a $200 million business with more than 900 employees. Satterthwaite wants to bring that same kind of growth to Snickelways. He spoke with VARBusiness senior writer Rich Cirillo recently about his plans for the firm.

VARBusiness: Can you give me some background on Snickelways and how it was formed?
Satterthwaite: From day one, Snickelways has been focused on building online businesses and helping companies make effective use of the Internet. It was started in 1993-1994 by a group of people with profound retail merchandising experience, both from a business and technology perspective. Initially they had a vision of commerce being done over television, because in the early 1990s there was a movement towards interactive television, supported by Time, AT&T and others. The founders of the business were a part of that, but it was a commercial failure because the equipment was too expensive and at the same time the awareness of the Internet as a backbone became prominent. So the founders of the company quickly switched from iTV to doing commerce over the Internet.

VB: I understand you took over as CEO in June. What kind of background are you coming from and why did you make the move to Snickelways?
Satterthwaite: I started and built a consulting practice at the Gartner Group that when I left had roughly 900 people and somewhere around $300 million (in revenue). I wanted very much to be more a part of the e-commerce revolution, using some of the consulting and management experience that I have. I previously worked at Andersen Consulting, IBM and Wang, and wanted to put that to work around a platform that I thought was durable and could grow and be effective. Snickelways is different from many companies in its profound understanding of the process of selling and buying goods on the Internet. So I made the plunge. It's a wonderful company.

VB: Are you planning to take the company in a new direction? What is your vision moving forward?
Satterthwaite: The goal for me is to dramatically scale up and grow the company. I am here to take the intellectual assets this company has to a dramatically higher level, supported by the investors we have in the company. In the past 12 months we did more than $14 million. We plan to double it in the next twelve months and then double it again. Our objective is for Snickelways to be a dominant supplier of e-commerce business solutions in the world of distribution, manufacturing and supply.

VB: Who makes up the company's client base?
Satterthwaite: Traditionally, Snickelways' business has been roughly 70 percent brick-and-mortar, B2B-type customers. In the past couple of years with the emergence of dot-coms, our business has evolved to sort of a 50-50 split. The dot-coms we are doing business with are very well financed and have substantial business plans. If you look at the current client base and the backlog of people we are working with, it is switching back towards 'click-and-mortar'. The interesting phenomenon going on is that virtually every company in the world now has a Web site. They are now going through Phase Two or Phase Three in trying to understand the relationship of that Web site to their brand and distribution strategy. As a result, they're re-architecting their sites and are asking for people who really understand their industries to help them.

VB: Tell me about the methodology or process behind the Snickelways solution.
Satterthwaite: We have a methodology called 'Catalyst' that has been created through the 100 or so engagements that we have done. We start with discovery, because many times people--whether they're dot-coms or brick and mortar companies who want an e-commerce solution--don't exactly know what they want. They just know they want to be relevant in the marketplace. Our discovery process asks things like: Who are you? What are your business objectives? Who are the competitors in the marketplace? How are they using and deploying the Internet for business benefits? How can you compete in that environment? What are you really trying to accomplish etc.? That provides us with a real path of what it is we have to do and where we have to go. We then go through a design process to identify the ergonomic requirements of your site. That is to say, what is the relationship required between the graphics of a Web site and your clientele? What kind of information are they looking for? How will they respond to the graphics? What is the relationship of brand to those graphics on the site? Out of that process we come up with a site design, which then becomes programmed through a technology staff to a fully robust, fully functional site that we manage to a point of early use. Our clients will then move their sites to some organization that manages them on a 24/7 basis. Then we stay engaged to help clients improve, enhance and alter their sites. We have many of our clients who stay with us for a couple of years, and then we are back in doing other parts of their business or other sites.

VB: How are vendor relationships incorporated into that process?
Satterthwaite: We are working primarily with clients in the supply-chain. If you think of that in the simplest of terms, you have to acquire goods, manufacture them, distribute them and then sell them. Snickelways is focused on the selling side of a transaction between manufacturer, distributor and seller. We will survey, research and understand the marketplace and use whatever software components make sense. If there's software out there, we use it. If not, we build it. We have relationships with a whole variety of companies that provide point-functional capability, and we integrate that capability into our solutions--whether it's credit card processing or bank draft processing. Some of the people we have either technical or marketing relationships with include Synchronity, True Spectra, Microsoft, Akamai, IBM and MarketFirst. For the most part, what Snickelways is doing is building custom solutions for clients. We are not a generic house. We are not taking large pre-packaged solutions and integrating them into our clients' businesses. We are creating explicit and very specific solutions one by one.

VB: Whom would you consider Snickelways' primary competition?
Satterthwaite: The traditional Web services providers--whether that's an iXL, Proxicom, Agency.com, AnswerThink or Viant. The IBMs and big consulting firms like EDS and CSC are also competitors. Clients will look at our industry-unique capabilities and compare them against these larger companies' capabilities. They compare our people against their people. It's sort of generic solution versus a boutique solution. In that regard we have competed against all these companies. We win some and we lose some.

VB: Do you see any benefits or drawbacks to Snickelways origins in merchandising and retail as opposed to being say a straight Web design or IT integration shop?
Satterthwaite: When the company was formed, it was formed equally between a businessperson, a design person and a technologist. One of the unique things the company has done from day one is to integrate business, design and technology. Steve Vardy, who is our Emmy Award-winning design head has been with the business from the very first day. His experience in TV production and the use of motion in a Web site has been there since day one. We in fact have been very integrated in our capability and it's sort of unique that the design people understand the technology and the technology people understand consulting. Second, our people can stand next to the business executives of our clients and talk in a very connected way about the business, the problems the customer is experiencing and how traditional concepts of merchandising can be applied to the Internet. It's that connection to business knowledge that people connect to us.

VB: How do you see emerging technologies or new media fitting in with the Snickelways' work?
Satterthwaite: I think there are two new 'media' things going on. One is mobile and the other is the general use of broadband and what that is going to mean in the use of the Internet. We support and are trying to drive enhanced use of broadband. Most B2B connections are broadband to begin with, but as the infrastructure fills out in the United States the opportunity is there for things like 3-D display of catalog items in a quick, efficient manner and the increased use of images and motion on a Web site. It's happening already. We have the production skills and understanding to do that. As far as mobile, the statistics are that there are many more mobile phones than there are PCs, and in the very near future, all of those phones will be Internet-enabled. We are building relationships with companies that have mobile applications skills. We are building mobile solutions for a couple of our clients. We feel like we are right in there.

VB: When looking out upon the e-services industry, what are you excited about? On the other hand, what frustrates you most?
Satterthwaite: It's interesting because the exciting part and the frustrating part are pretty much the same. The demand for what we do is just incredible. I've never worked in an industry with so many customers who want and have already self-justified the work that companies like Snickelways perform. But that tremendous demand also causes the frustration, which is that there are not enough people to go around. What has me the most frustrated is that the quality of work being done by the industry is not as good as it should be. The whole industry needs to do a better job delivering quality solutions on time and on budget. All of us are competing for rare technical resources in a booming world economy. It's difficult maintaining good client-deliverable quality, keeping people and finding ways to make them loyal to you as a company and loyal to the clients you are working with.

VB: How do you view expansion?
Satterthwaite: Any company has to have a global view. I personally have managed companies all over Europe and Asia. We do have a specific global activity right now in India that we started about a year ago. The Indians are very well educated and highly technical in their capabilities. We are doing development work there and expanding that operation. That is in support primarily of the work we are doing in the United States but it will be a kick-off point for work in Asia. I expect that by the end of this year we will have an office of some sort in Europe.

VB: What kinds of companies are going to be most successful moving forward?
Satterthwaite: The majority of the revenue that is currently being derived comes from technical services--the coding of Web sites. However, those companies that are growing the fastest and will endure are the ones who will also provide strategy and marketing services within what they do. Companies that just code Web sites and just do the technical solution will not grow anywhere near as fast as those who can blend consulting strategy and marketing services.

VB: What gives with the name Snickelways?
Satterthwaite: It is perfection for describing what it is that we do. A 'snickelway' was a place in old England during the Middle Ages where buyers and sellers met in the village to exchange goods. At Snickelways we have pioneered the transition to online commerce by connecting buyers and sellers in revolutionary ways. So we are the embodiment of 'snickelways.' There are lots of crazy names out there, and I would argue that Snickelways is just as relevant a name for a company as Razorfish is.