Nick Kozak for the Toronto Star
Case Studies

Toronto’s SurfEasy scrambles to meet global demand for privacy plugin

Selling the perks of SurfEasy’s software is easy. Pushing out the product globally? Not so much.

The Toronto-based tech start-up has invented a new approach to secure Internet browsing —

a USB key, with its own web browser, that can be used in complete privacy on any device. It connects through a secure server, so users can’t be tracked, and saves encrypted versions of history, bookmarks and passwords to the flash drive — as opposed to computers — so no data is left behind.

Costing USD $69.99 for unlimited data, plus $3 to $10 per month (depending on data usage) *editor’s note: SurfEasy has dropped their monthly fee since this article published*,  it’s a category-creating product, and has caused a sensation among mobile computer users worldwide. Several thousand have already been ordered, in 48 countries, since the product launched in March.

CEO Chris Houston sparked the demand through a mix of savvy, cost-efficient marketing strategies. But such extreme popularity has caught the company off guard — SurfEasy has never had a sales plan for going global. The business originally planned to sell only from its website, and mostly to customers in North America.

Now, Houston realizes he needs to sell through tech retailers, and on a global basis. Otherwise he risks missing the passing wave of consumer and retailer demand, or even worse, losing lucrative international markets to imitators.

But the marketing strategy, which revolved largely around generating positive press, has done little to lure in global retail chains, and, because they weren’t planning to expand so quickly, the company doesn’t have a budget to up spending dramatically.

Those limited dollars could prove especially troublesome because of all the additional costs of selling globally — paying distributors, networking with retailers, running ads in foreign media, and hiring lawyers to draft international business contracts.

Houston, a wireless tech marketing veteran who’s worked with Virgin, Bell, Boost Mobile and (the now defunct) Amp’d Mobile, is keenly aware of his company’s success, and its current risky position.

“It’s best to do deal with retailers when they want to deal with you, rather than coming back in a year when we’re ready — who knows if they’ll still be interested?” he says.

Incorporated in March 2011, SurfEasy began with just two staff, Houston and Athir Nuaimi, the company’s chief technology officer. They had investors from the start, but that cash was eaten up by development, manufacturing and hiring (they’re now up to 12 staff). As a result, Houston and his team were forced to save marketing dollars with free- and low-cost PR strategies. The most successful venture was pre- selling a discounted beta version of their product on Kickstarter, a leading crowd-funding platform for creative projects. Within weeks, the company had $78,000 in sales.

They also shipped sticks to tech journalists across North America, landing stories in Maclean’s, The Globe and Mail, USA Today, CTV, CNN and more. The campaigns were highly successful, but still haven’t led to contracts with tech retailers.

“In the international sphere, it’s a little trickier,” says Moren Lévesque, a professor at York University’s Schulich School of Business. She says business owners need to consider commerce laws, intellectual property protection, advertising regulations, cultural differences, even currency exchange rates — all of which factor into selling overseas, and all of which can add significant costs.

Working under the exposed beams of a renovated loft-style office building in Toronto’s King West neighbourhood, the business team is focused on connecting with the right partners. So far, they’ve secured distributors in the U.S., the U.K. and Australia. They’ll work to identify suitable retailers and sell the stick on SurfEasy’s behalf in exchange for a  percentage of sales.

But relying on distributors is risky, and making sure they actually get the company’s product on store shelves may be even harder than Houston realizes.

“If the distributors can make more off another product and put in less effort, that’s where they’ll put their time,” Lévesque says.

As well, she says, because SurfEasy is a first-of-its-kind tech product, the company will need to provide third-party partners with the right information to make sales. This is especially costly when targeting non-English speaking countries.

“It’s not another pair of jeans or sneakers — distributors need to be educated to sell them properly,” says Lévesque.

Plus, she adds, distributors won’t be interested in moving SurfEasy’s keys if there’s a lack of awareness among consumers in their target markets. The best way to create this awareness is, most likely, with a conventional marketing campaign. But the company just doesn’t have the cash.

SurfEasy’s limited budget is also causing other problems, and has meant passing up potentially lucrative — but costly — deals in the business sector, including requests from large corporations for a branded version of the SurfEasy key that includes their own software.

“These opportunities can suck up a tremendous amount of resources,” Houston says.

Still, the free-or-cheap marketing campaigns have worked wonders so far. The strategy even landed SurfEasy on the Home Shopping Network in the U.S. — within eight minutes, all 500 available units sold out.

In other words, demand is ripe — the challenge is being able to deliver, and to do so before consumer interest starts to rot.

EXPERT VIEWS

As Interviewed by: Tom Henheffer

SurfEasy is addressing an unmet need — portable privacy — in a really simple way, and as a result they’ve created a huge response. Still, they weren’t anticipating so much demand, and now they’re caught in a catch-22. It’s a great problem to have, but they need to free up some cash for marketing. So, the company should look at what they’re paying for data and wireless plans. If they’re highly mobile and constantly need online access, they should talk to their telecom about data sharing plans to find some serious savings. Then, they should stretch those marketing dollars. The right SEO will help ensure they’re in the top results when users search for security or safety, and the company should figure out how to make their demo videos go viral. That way traffic doesn’t need to be driven to their website because information will find its way to users directly. Finally, at the retail level, it’s important to implement videos in a way that draws crowds in, and educate staff so they can ensure potential customers know exactly why they need SurfEasy’s protection.

by Tisha Rattos

As people increasingly use mobile internet, the importance of privacy and security is growing exponentially, so SurfEasy is a great product at a great time. They’ve done a fantastic job getting free publicity, but I don’t think the company should be worrying so much about marketing — their problem lies in the retail distribution model. It’d be far better to go directly to the businesses making the devices people are already using with SurfEasy. The company can work with mobile technology vendors, like Apple and Samsung, to preload software onto smartphones and tablets, with portable PC companies, such as Dell and HP, to package the USB key with their hardware, and with telecomms like Bell and Rogers to distribute their software through a franchise arrangement. It would be a similar strategy to XM satellite radio, which comes pre-installed, with a free trial subscription, in many new cars. The challenge with this model is getting users to renew that subscription. But it’s worth the risk, since the company will be reaching far more customers while seeing its distribution costs plummet.

by Ron Babin

SurfEasy have done a great job using free publicity so far. But that kind of advertising often isn't focused enough, and developing a real marketing budget is probably inevitable. A business needs to be able to choose exactly what its message is, when it goes out, and who it targets. This can get expensive, especially since a variety of different approaches are often needed to sell in different markets such as Europe, Asia, and the Middle East. SurfEasy’s dollars can go much farther if they target a specific geographic area. North America, Canada in particular, has some of the highest internet usage in the world, so there’s nothing wrong with doing a staged rollout here. If they do their research and get the messaging right, the company can impact more people with much less effort. Still, it's understandable that the company is afraid of losing the global market, but they don’t need to dominate the world right away. Word will spread amongst satisfied users — and they'll find ways to get SurfEasy. The key is to build critical mass early, and in a specific market.

by Mike Feaver

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