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.