"Maybe you’d like to take this brochure we prepared about six months ago, so that you will also have something in writing". The generous offer came from Sefi Vigiser, one of the four young founders of Mirabilis. "This is the only marketing document this company has ever spent money on", he admits. "Other than that, we do not invest in marketing, we have no sales personnel, we do not take part in exhibitions, and we have no public relations activities".
Mirabilis is perhaps the most patently characteristic product the Internet culture has given the world. The company, founded just eighteen months ago, has already managed to distribute its ICQ (I Seek You) software to eight million users world-wide, with the number increasing at a rate of 20% per month. All without so much as a single marketing agent.
The company’s marketing method is presently based on the users themselves. They tell their friends about the software. Mirabilis was the first to introduce an innovative distribution technique dubbed "word-of-mouse", enabling the users to propagate the program from within itself with the click of a button. Thus the number of people using the network contrives to multiply, just like in pyramid selling. The only difference here is that nobody is paying. For now.
ICQ, the Internet’s Cellular Phone
If you haven’t yet heard of the new Internet rage known as ICQ, then either you are not yet hooked up, or you have no friends in the world.
Let us try to think, for a moment, of the Internet, that formless, virtual expanse, as a sort of huge city. Leading to this city are a number of fast roads. There are several gateways all around it, there are public transport vehicles, high streets, shops and newspapers, cafes, libraries and museums, information centres, billboards and no end of places of entertainment and amusement.
The gateways are the browser software packages - Netscape’s Navigator and Microsoft’s Explorer, through which the surfer crosses the border between the real and the virtual world. These software packages also represent the vehicles, the taxis, buses and cable cars of the Internet, with the help of which the user finds his way among the city’s sites, shops and other attractions.
The role of information centres and billboards is played by the search engines (Yahoo, Alta Vista, Excite) that help the user orient himself in the virtual expanse. The stores and shopping malls are sites such as those of Amazon, Barnes & Noble (the Internet’s bookstores), or the Dell computer store.
The cafes and clubs are the various chat sites, where people who have never set eyes on one another can meet, and conduct profound intellectual dialogues, or just idly chat, or even fall in love.
The tourist straying into the big city may sometimes feel lonesome and far from home. It is precisely to fill this void that the ICQ technology is designed. The ICQ user is enabled, at any given moment, to know whether his real or virtual friends are presently linked up to the Web and free for a chat. He can converse with them by means of the software, he can receive and send files or messages, and can also make his excuses and ask to be contacted later, when available. ICQ, in other words, is the cellular telephone of the Internet.
Good Revenue Potential, For Later
Mirabilis, founded in mid-1996 by four Israeli partners, was the first to put such a product on the market. Six months passed until the first competitor appeared. By that time, the company already had 850,000 users, forming a critical mass, on the strength of which it was able to preserve a substantial first mover advantage, and edge out the competing programs of world leaders such as Netscape, Microsoft, and AOL.
The company, however, is still not generating income. The potential is there, but the main direction is still not quite clear. One possibility currently being explored is that of selling advertising space for banners, but there are other options too.
Meanwhile, the company has decided to concentrate on the rapid spread of the Net and on aggregating as large a subscription list as possible. They are, if you will, distributing cellular telephones free of charge, before the advent of the second operator. "Revenue", they tell us reassuringly, "will come later".
The Sunnyvale California Submarine Stage
The four founders of Mirabilis are Sefi Vigiser (25), Arik Vardi (27), Yair Goldfinger (26) and Amnon Amir (24). The four, who describe themselves as "Internet freaks", knew one another previously, and at a certain stage decided to leave whatever else they were doing and get together "to develop something for the Internet".
The founding group was joined in short order by Arik’s father, Dr. Yossi Vardi, who handles the company’s business aspects and strategy. Vardi senior also contributed the initial funds required for the development stage and for setting up the network in the United States. The company has no general manager at present.
"Globes": How did the idea of ICQ first come up?
Vigiser: "We sat down to think, and traced what did and what did not exist on the Internet. While we were playing with various ideas, the ICQ idea also came up. We quickly grasped that this idea was good. We could not know, of course, that it would catch on so quickly everywhere in the world.
"The minute we realised this was it, we began running around like madmen to develop the software as quickly as possible. In four months of working in secret, in almost underground conditions, we had a working product."
Did you have to raise money at that stage?
"We didn’t want to use up a lot of money to begin with, and we didn’t co-opt anybody else. We soon saw that, in order to continue to develop the product, we would have to relocate to the United States. This was done out of technical rather than marketing considerations. We went there because most users are in the United States, and also because communications lines are very much faster and cheaper than in Israel".
Vardi: "We did all the organising from here, via the Internet. All we had to do was to find a small apartment for the three of us, and an Internet line. We didn’t need to know anybody else in order to start work".
Vigiser: "There, in Sunnyvale, California, the company’s ‘submarine’ stage started. Since we knew nobody there, and because there is nothing else to do there, we simply sat twenty-four hours a day in a little room and worked on the software".
1.3 Million Users Daily
For the past three months, ICQ has already been starring in first place in terms of the number of downloads. The current figure is 240,000 downloads a week. By way of comparison, the next program on the list, namely Winzip, "only" gets 80,000 downloads per week.
The Mirabilis home site is one of the most popular on the Web, currently placing seventh, out-ranking even MTV, ESPN and other popular content sites. This is, of course, just one example of the commercial potential that the company has not even begun to exploit.
Mirabilis can tell you of the 1.3 million people using the software daily. Average use per user stands at half an hour a day, and aggregate monthly use of the ICQ program now comes to 165 million hours.
At peak hours, the Mirabilis communications infrastructure accommodates 370,000 simultaneous users.
40-Million-User Community
Mirabilis presently has a payroll of sixty. Six employees in the United States are engaged primarily in support, under Goldfinger’s supervision, and the others are in Israel.
Vigiser: "At first, it was rather hard, and we recruited mainly friends and friends of friends. Now that there is a high level of awareness of ICQ, and all Internet users know about us, it is much easier to attract new people. Just one month ago, we had 45 people altogether, now we have sixty, and we are still recruiting".
The average age of employees in Mirabilis is similar to that of the founders, presently around 25-26. Two more mature programmers aged over 40 were recently hired, "but they’re good guys", say the founders.
Where do you see yourselves two years from now?
Vigiser: "In two years time, I would like to see this program become standard, with 40 million users world-wide. The definition of someone with ICQ would be anyone who has a modem and a hook-up to the Internet. That’s all".
Published by Israel's Business Arena February 11, 1998