News Archive - 11.05.01

Snap! Crackle! Popcorn! LeapFrog Interactive Grabs Prospects Attention, then Dots all the i’s

LeapFrog Interactive Inc.'s offices boast a ping-pong table, a dartboard and a room full of toys and candy. The Web-design and marketing firm's 10 employees -- the oldest just turned 30 -- are encouraged to write on the walls and take days off for group trips to Six Flags: Kentucky Kingdom and other attractions.

Given that this is recession and terrorism-soaked 2001, not the dotcom boom times of 1999, all this seems oddly anachronistic. But while similar technology companies have gone the way of carefree domestic air travel, LeapFrog Interactive has seen an 87 percent increase in sales this year and has added 14 clients since January, bringing the total to about 50.

LeapFrog Interactive turned its first monthly profit in May; its first quarterly profit two months later and soon will wrap up its first profitable year. The company also expects to hire two to four more people in the next six months.

Chief executive Daniel Knapp, at 28 is already a veteran of stints at General Electric's Appliance Park and a Michigan accounting firm, said the company -- tucked away in an eastern Jefferson County office park -- has thrived through innovative marketing strategies and its approach to building the 2-year-old business.

For one thing, there was no venture-capital money to mindlessly burn through.

''We bootstrapped it. We did it ourselves,'' Knapp said. He and vice president Alan Gilleo contributed the capital, and each employee owns part of the business. ''Instead of going out and spending $50 million to put ourselves out there, we started building on a base of small-business clients.''

From there, the company moved to medium-sized and large companies and ''hitting our target market, companies that are very aggressive on the Web.''

The firm also uses a lot of popcorn.

Todd Bright, vice president for marketing, can sometimes be seen wheeling LeapFrog Interactive's popcorn machine down the corridors of clients and prospective clients.

''Besides the fact that we love popcorn, it also has a very specific use for the client.''

If a prospect company has large teams where a lot of employees have to be sold on hiring LeapFrog Interactive, ''we have to take our product out and integrate it with a lot of people,'' Knapp said. ''We go in with our popcorn machine.''

As Bright explained, ‘‘if you've got a guy wheeling down the aisles giving away free popcorn, you become very popular very quickly.''

There's skepticism at first, but it gets conversations started and makes acquaintances, Bright said.

''Our name is on the popcorn popper, and if I ever need something from somebody, I call them and say, 'I'm with LeapFrog Interactive,' and everybody knows me. When we say, 'Can we have half an hour?' they say, 'Sure,' because we've earned it.''

The machine helps with what Knapp said has been the company's biggest challenge: ''How do you get in the door, how do you get the meeting? Putting together a marketing campaign that gets us past that point has proven remarkably beneficial.''

The company's reputation for wackiness is itself part of LeapFrog Interactive's marketing. That intrigued Tim King, executive director of the Louisville Orchestra, when a board member referred the firm to him.

King was looking for ways to spiff up the orchestra's Web page.

''I want us to portray that maybe we are just a little bit off the wall, and that's OK, if we're going to attract a younger audience,'' he said.

The orchestra wasn't taking full advantage of its Web site, King said.

''We weren't selling tickets over it, we weren't offering ticket deals or (making) updates, and we weren't changing the front of the Web site on a daily or weekly basis,'' King said. ''Once you've surfed a site, if it looks the same all the time, you're not going to go back.''

The orchestra approached LeapFrog Interactive and asked for a complete change of look, ''which they did, but they also made it user-friendly'' in that people can log on and buy tickets, King said.

''The first pops concert we had this year, we sold $3,000 worth of tickets just over the Web site,'' he said. ''That was good, and I see that as the trend.''

What has really sold King, however, is the substance behind the style.

''They did everything they said they were going to do for the money they said they would do it for,'' he said. ''When I sent e-mails to them saying, 'I need so and so done by such and such a time,' I would get a very detailed e-mail back from Dan in 10 minutes about their plan of action, and they did it.''

Terri Green, an account supervisor at Creative Alliance, a Louisville advertising agency, recalled the time the LeapFrog Interactive team, which was doing some work with the firm, came through the office distributing candy bars and even metal frogs to employees.

''The candy bars had intriguing messages on how that candy bar ties into how much they want to do business with us and how they value the partnership,'' Green said. ''They had the frogs decorated and named, kind of like Beanie Babies. They gave everybody their own frog, and everybody has them sitting out in their offices and they're constantly thinking about them.''

Once a month, she said of the LeapFrog Interactive team, ''they come through, and they do something.''

Knapp said LeapFrog Interactive's true turning point came last November, when the management went off on its annual retreat to plan and budget for the coming year and gauge where the economy was going.

The signs weren't good.

''We certainly saw something coming that our industry wasn't used to,'' Knapp said. ''We launched an all-out (marketing) effort, and I think that really has been the turning point in our business.''

That meant resisting the urge to cut back on advertising and marketing, as many businesses do in a recession. Instead, those efforts were actually increased -- and things got easier for the company as competitors dropped away.

''One of the things that's helped us, though, has been kind of a different take on our industry,'' Knapp said. ''We've approached it with more what we're terming an 'agency model' than the rest of our industry has.''

Instead of simply taking a job, finishing it and moving on, Knapp said his company assigns an account executive and production manager to each client for the life of the account -- as advertising and public-relations firms do.

The company's high-energy, playful style requires a precise chemistry among its employees, which makes hiring another major challenge.

Knapp said that while the fundamentals come first (a strong work ethic, résumé, portfolio and experience -- an ad-agency background is required), a prospective employee also has to mesh with the culture.

''We go through quite a few people'' before filling a position, Knapp said. ''Finding a Web developer with an ad-agency background that's got a degree in graphics design or an arts degree -- that's challenging, finding that mix, and layered on top of that is the cultural element. Will they fit in and grow and expand themselves within our culture?''

Gilleo said an applicant's portfolio often provides a hint of whether they'll fit in.

''A lot of times, you can tell people's personality by the way they design,'' he said. ''It comes out in their graphics and whatever they do. If their work fits into our standards, chances are their personalities tend to be more like ours.''

Knapp said the youthfulness of the company's work force is more by accident than design. If a qualified 80-year-old applicant stopped by and fit in, he or she would be hired.

Knapp said LeapFrog Interactive's laid-back culture and technology itself seems to naturally attract a younger work force.

About that culture . . .

''Some people might say, what kind of business is that -- they're going to Kentucky Kingdom three times a year?'' Bright said. ''Those things bring us closer together, enable us to work better together, to be more efficient, to be able to increase our profitability.''

The company picked its name because, as Knapp explained, ''It gives a feeling of momentum and forward movement. We liked the name of a Chicago company called Giant Step because it evoked all of those same things. We looked for a name that did the same thing, and we came up with LeapFrog Interactive.''

One problem: Leapfrog.com is taken by a California toy company. For its Web address, LeapFrog Interactive settled for ribbitt.net.

People really like the ribbitt,'' Knapp said. ''They get the joke. We found a web address that keeps with the theme that we're fun and creative.''

While he enjoyed working for GE, Knapp said there's nothing like owning a business.

''I come from a family of small business owners. I had a bug in me to do something entrepreneurial. It's always been a drive of mine, something I love to do. It really is just a dream come true.''