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Unica The Grand Design

  Executive Interview published in DM Review Magazine
May 2002 Issue
  By Val Latzke

"When I was 11, I won the city of Taipei's young artist award," remembers Yuchun Lee, co-founder and CEO of Unica. A few years later, in an interview for his high school yearbook, the talented artist recalls, "I proclaimed that I was going to MIT to obtain an architectural degree."

It is obvious that this plan was supplanted. How did a man with a penchant for design become the CEO of Unica, the company that provides award-winning enterprise marketing management solutions?

Lee did not completely realize his yearbook prophecy. Instead of pursuing architecture, he opted for baccalaureate and master's of science degrees -- both from MIT -- and continued his education by obtaining an MBA from Babson College. He notes, however, that the pursuit of these science-related degrees did not force him to abandon his desire to design. He explains the artistic element of computer science as follows, "I wasn't really introduced to software until high school. However, after I started programming, I realized that it is the ultimate, purest form of design. I consequently became very enthusiastic about computer science -- enthusiastic enough to revise my original plan and obtain related degrees."

However, Lee isn't forced to depend on the design element of computer science as an outlet for his artistic abilities. Clearly, as Lee describes his company, his two prominent strengths -- both computer science and design -- are mission-critical to his leadership of Unica. He begins, "Ruby Kennedy, David Cheung and I founded Unica in 1992. We came from the same graduate program at MIT and all have a very high level of expertise in data mining, predictive modeling and statistics - the analytic part of technology that forms the foundation of Unica's enterprise platform."

"We provide end-to-end enterprise marketing management solutions to help companies run their entire marketing operations. That covers everything from customer analysis and understanding of customers to execution of marketing campaigns across the different electronic channels of e-mail and the Web as well as call centers and direct mail. We help our customers coordinate all the activities of running those programs and the resource optimization around that," says Lee. "Based on an open, scalable architecture, our Affinium Suite enables marketers to gather and analyze knowledge from multiple data sources; identify customer wants and needs; plan, execute and manage tailored programs for interactions through multiple touchpoints; and measure and optimize marketing effectiveness to provide a consistent, cross-channel customer experience."

The founders' MIT education and core competencies were the catalyst for the production of their unique solution. "We have very strong product differentiation," acknowledges Lee. "Without getting into the technical details, it surrounds two dimensions. One dimension is that we help companies implement their CRM and marketing visions without taking a lot of risk on projects. We take a pragmatic approach, and our customers are able to get up and running and find success a lot more quickly than they would with other systems. On the technology side, that's a huge differentiator for us. The second dimension is analytics. Unlike other companies that build their solutions on database technologies, we've built ours based on analytical technology, data mining and statistics. However, when a company considers a product, they consider more than technology -- they consider their own needs and requirements. Because of our product differentiation and because I have individuals who are responsible for customer success reporting directly to me every day - thus giving customer concerns the highest level of attention - we have the highest customer satisfaction in the industry. Our customers are our greatest advocates."

It may be Lee's design acumen, evident in the plan he has developed for Unica, that enables the company to continue to produce as they do. "A billion-dollar company is built one brick at a time, and it's built as a company that knows how to make money," attests Lee. "Building this design is more difficult than most people think. There are a lot of companies that aren't making money, and I'm not sure that they ever will. However, in the long run, Unica will be successful because our mission is to build Unica as a billion-dollar company." Lee maintains, "We know the technology space and we know it's in its infancy in terms of what it can do in enterprise marketing software. We're confident of the opportunity out there."

Lee remarks, "The market tends to go through boom and bust cycles in addition to the business cycle -- and we have been relatively steady in our progress through these phases. Our direction is simple. We are satisfying the demand of directors of marketing and the IT staffs that support marketing operations. Through the ups and downs, we are very careful to ensure that we identify our customers and provide a product that clearly adds value and can be differentiated from a core-competency standpoint in the market. The truth is that we haven't shifted the direction of the company at all, even through the CRM cycle and the dot-com cycle. We're focusing on the areas in the market where we're adding value. For this reason, we're in sharp contrast to the foundations of many of the companies born in the dot-com era."

Throughout the cycles and the growth, the company's success can be attributed to the Unica team -- again, a result of Lee's design and business skill. He reveals, "We're extremely careful with our hiring. Part of the reason that we put a great emphasis on this process is that our goal is not to go public or sell-out; it's to build a lasting company. For that reason, we have grown the company organically; and even through periods of rapid growth, we have been able to maintain profitability in most quarters. The attainment of Unica's goal requires the appropriate contribution of every individual brought on board. We're human beings, and we're behind the products that we build. Even though we're in high tech, we're really a people company."

"If you ask any of our competitors, customers, partners or analysts what they think of Unica, they'll tell you that we have a great product and smart people. Unica is full of very smart professionals. The way we operate and the way we interact is professional, yet down-to-earth. We're not a flashy company, but we are fiercely competitive," reports Lee. "The people here are self-motivators -- they don't need to be pushed or conned into doing anything, and I think this is the reason we've had fewer than a dozen voluntary attritions in the company's entire history."

Obviously proud of the Unica team, Lee continues, "To be successful, you don't even need to make more good decisions than bad. You just have to correct your bad decisions very quickly so that at the end of the day, you're moving in the right direction. To correct the bad decisions, you must be able to be brutally honest with yourself. The foremost characteristic of a Unica employee is intellectual honesty -- the quality of being honest with yourself and your opinion, which includes the ability to always stand up for what you believe is right. With employees of this type, the games and politics within the company are minimized."

Speaking of games, there was a time when Lee's job was to play blackjack at casinos around the world as a member of a professional applied statistics organization. He explains, "I worked for a company owned by investors that are ex-blackjack players. They won a lot of money during their careers and are now black-listed from casinos. They train recruits who are fresh faces. After three months of rigorous training to earn the required certification, we visited the casinos in teams and won more often than not. Approximately 90 percent of the employees of this 20+ year-old corporation are MIT graduates. The most difficult part of my tenure with this company was the acting. We had to act as if we were high rollers while performing various statistical calculations in our heads. This is completely legal as blackjack is all statistics and probability." Fortunately, the transition from play to work (as it were) was not difficult for Lee. When it was time to "get serious," Lee was able to do so with ease in founding Unica.

"What gets me most excited is building a lasting company. I think this is a high- level challenge - I need to expend energy to build a company that will last. Building this company is my dream," discloses Lee.

"The companies that will be providing the next wave of solutions will be the software companies - large and small. Unica is still a small company, but we're confident that we have built the company like a billion-dollar company. We looked at actual billion-dollar software companies and reviewed their history to determine what they looked like when they were at our stage. We've learned there is only one way to become this kind of company: You must obtain a commanding lead in a space, garner a very high gross margin of 85 percent or more, be profitable and grow fairly rapidly in all of these criteria. We've grown approximately 100 percent in the last 12 months, and we meet every one of these criteria. Although this isn't easy, what gets me out of bed every morning is that we are building a company that will last - and that's a lot more challenging than just gaining traction and getting revenue," proclaims Lee.

The path Lee has chosen for building Unica isn't always easily understood. Lee explains, "Because of our progress as a company, we interact a lot with Wall Street analysts who are interested in tracking us. As recently as a year and a half ago, some firms on Wall Street still viewed us as idiots. They couldn't understand why we cared about profit and gross margin. The firms and analysts were not paying attention to all the benchmarks we use to peg Unica to a billion-dollar company. I think it's amusing that now they consider me a genius for making money."

Although Lee contemplated his plan to obtain a degree in architecture from an early age (third grade) -- he may have realized his grand design would come later. Beginning in 1992, and not ceasing since, Lee and all at Unica have been steady on their path. "If I had been left to my own free will, frankly, I would have probably become an artist. However, my parents effectively dissuaded me from this career choice," says Lee. Unica employees and customers are glad they did -- and convinced of his grand powers of design.


For more information on related topics visit the following related portals...
Campaign Management.

Val Latzke is an editor of DM Review magazine. She can be contacted at valerie.latzke@sourcemedia.com.

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