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Anyone who questions whether persistence pays should take note of relentless Robert LoCascio. After a series of staggering setbacks, including the failure of his first company, the 41-year-old entrepreneur has made the most of his second chance to succeed in business.
LoCascio’s LivePerson provides technology that encourages consumers to purchase over the Internet. The technology facilitates real-time sales and customer service, allowing shoppers to initiate instant online chat sessions with representatives of retail companies. LivePerson also provides instant analysis of consumers’ needs based on their Web-site clicking patterns, which helps retail representatives convert chat sessions to sales transactions.
“We give consumers the ability to ask those couple of questions to feel comfortable to spend,” LoCascio says. “The consumers love it because they don’t have to get on a telephone. It’s instant, and they can get that help they need.”
The formula has worked. LivePerson has grown despite the nation’s challenging economic environment. In the third quarter of 2009, the company rang up $22.3 million of revenue and $2.3 million of net income, compared to $0.4 million net income in the same period of 2008. Projected revenue for 2009 is between $86.1 and $86.4 million. More than 8,000 companies now have Web sites enhanced by LivePerson technology, including EarthLink, Hewlett-Packard, Microsoft, Qwest and Verizon.
As the son and grandson of entrepreneurs, LoCascio got the itch early on, and his first and only corporate job experience reinforced his interest in being his own boss. After graduating in 1990 from Loyola University in Baltimore, he went to work for a large international conglomerate. The company eliminated his job about six months after hiring him.
“I got laid off by fax,” LoCascio recalls. “They picked me because I was the youngest and the newest guy. I remember thinking I never want to work for anyone again. It was the most disempowering situation in my life.”
More disenchantment would follow. LoCascio went on to build a network of interactive video kiosks on college campuses from 1991 to 1995. His company, IKON, grew for a while with advertising clients, including Citibank, Northwest Airlines and other companies. “Then, in 1995, I had to basically fold it because it ran out of money, and also, the Internet was coming. I had a lot of debt on credit cards, and I owed some money to friends and family,” he says.
Determined to make the Internet his friend and not his foe, LoCascio spent the second half of the 1990s building LivePerson. By 2000, the company had made enough headway to sell its stock in an initial public offering. But a massive bubble in the market value of Internet stocks was just starting to burst.
“By January of 2001, it was pretty obvious that we were going to go out of business,” LoCascio says. “We were burning through about $2 million a month and we had about $20 million in cash.” Facing the potential insolvency of his company within a year, LoCascio launched a radical restructuring that resulted in the layoffs of 60 employees.
The company’s stock continued to languish in 2001 despite the restructuring. Priced at $8 in the initial public offering, LivePerson’s stock closed at 7 cents on Sept. 11, 2001, the terrible day that LoCascio and his staff watched in horror from the company’s Manhattan headquarters as terrorists toppled the World Trade Center.
“One of the underwriters who took us public came and saw us and said, ‘You’ll never make it. No one ever survives [with a stock price] below a dollar,’ ” LoCascio says. But that underwriter didn’t know about the LoCascio legacy of determination. “The worst thing you can do is tell an entrepreneur he can’t do something, so at that point, everybody in the company was pretty determined to keep it alive, including myself.”
LivePerson was leasing 82,000 square feet of office space in Manhattan—a sizeable obligation. The devastation of Sept. 11 cost Bank of New York their office space (though, thankfully, none of their people), and they urgently needed to relocate. “They took us out of our lease—our two floors—and that enabled us to become profitable,” LoCascio says. “We’ll never accumulate a lot of real estate again. That was a lesson learned.”
After regaining financial stability, LivePerson went on to win major contracts from Bank of America, Apple Inc. and other companies, largely on the strength of shopper-analysis capabilities embedded in its technology. “We enable companies to target people on a Web site analytically,” LoCascio says. For example, the application helps companies identify shoppers who are more likely to convert to a sale if they chat with a customer service rep.
LivePerson also has an online community where people can chat live with a wide array of experts providing advice and charging by the minute. Among other types of online experts, “we have psychologists, spiritual advisers, doctors, lawyers,” LoCascio says. “It’s holding its own. Revenues have been steady there because, especially in uncertain times, people need advice.”
The idea for the expert community came out of LoCascio’s own philosophy. In guiding his company to the next level, he routinely draws on outside expertise, not just his internal team at LivePerson. “I try to get internal views and external views when I make a very important decision,” he says. “I keep in contact with even competitors of mine—CEOs I compete with—and other people inside the industry and outside the industry who will give me a different look.”
He also believes it is important to “look for two things: skill and will,” when hiring or firing. Few employees are content to remain with a company from its startup phase through its development and maturation. “As much as you would like everyone to be with you for the journey, you find that a lot of people, over time, will get burned out,” LoCascio says. “We’re constantly growing, constantly trying to better ourselves, and so, over time, I think you do have to bring in new people to add new energy to the company.”
As for fear of failure this time around, LoCascio says fear “is a natural thing, but it can hold you back. I’ve seen it over and over again in building this company over 15 years: You always face challenges, and if you ever quit, you’ll never know what could be on the other side.”