How tough tactics wooed Microsoft to come on-line

Dan Wagner; THE TUESDAY INTERVIEW

Dan Wagner, the multi-millionaire entreprenuer who founded MAID, has a ready story to prove just how useful his on-line business information company can be to customers.

By using the system's "key-word" search function, MAID's chief executive last year came across a small item from a US trade publication about Microsoft's then-secret preparations to launch an online network of its own.

He picked up the phone and made a cold call to Microsoft's headquarters near Seattle, leaving a cryptic message on the company's voice mail system. "Hi, this is Dan Wagner, and I'm calling about Project Marvel," he said, using the code name that the trade publication suggested was attached to the top-secret plan.

Bill Miller, the man responsible for development of the Microsoft Network, returned the call, intrigued. Mr Wagner, the quintessential salesman, right down to his slicked-back 1980s hairstyle, made his pitch, offered his range of business information to the then-nascent network, suggesting the two companies work together. A few weeks later, negotiations were under way.

A year and a half later, with the deal done but not yet announced, Microsoft was poised to launch its Window 95 operating system, which features pre- loaded access to the MSN. When MAID put out its press release earlier this month, revealing a joint venture under which MAID's products would be available through the MSN, the results were immediate and dramatic. The shares of the publicly traded company, launched with difficulty last year at 110p a share, far short of the 150p his advisers had pitched, promptly doubled in value from their admittedly low level of 82p. A day later, they rose again, to as high as 230p. Mr Wagner's own stake had climbed in value by pounds 36m in 48 hours.

Not bad for a man many in the financial press called "arrogant" and "abrasive", and whose company was reckoned to be a dud when it came to market last year.

"I was amazed at the extent of the run," Mr Wagner says. "But once it was up there I didn't think it would fall back that dramatically. We came to the market a year and a half ago at pounds 1.50, and due to a rather unfortunate set of circumstances, the price was cut to pounds 1.10 and fell thereafter. So the investors who had committed at pounds 1.50 valued us at pounds 1.50 18 months ago and all that has happened between that point in time and today is that we have achieved everything that we said we would do in our prospectus. We haven't let anybody down."

MAID is an overnight success story 10 years in the making. Launched by Mr Wagner in 1985, following his brief career as a salesman of electronics goods, the company began to make inroads in the US, signing up a clutch of leading companies - including Microsoft - that needed help with corporate, stock and industry data.

Although based in London, the company still does most of its business in the US. Part of the reason stems from Europe's status as a laggard in the information revolution. There were only 150,000 on-line users in Britain by the end of 1994, but fully 8 million in the US. Mr Wagner was merely going for the biggest market.

But he also prefers the way business is done in America. "Britain is not a nation of salespeople and America is," he says. "You can't think you are going to go to America and sell with your British ways. Americans are bottom line, everything is bottom line. If you can't justify that you're $2 more expensive than someone else, then the guy's not interested. If you can't catch the guy's attention within the first 10 seconds when you call someone, he will put the phone down."

Pushing electronics goods in London was a training grounds of sorts; so was having a father with two car dealerships. But the real lessons came in the doing. In 1986, Mr Wagner, then 21, rented a two-bedroom New York appartment with three colleagues and hit the telephones.

"I'm known to be abrasive, arrogant," Mr Wagner concedes. "But I'm a salesman, and I've had to sell in difficult situations in America. Coming back to London, I've applied those hard-hitting sales techniques here, and it's effective. People may not like our arrogance. We're straightforward: we ask for the order, instead of sitting there asking for a cup of tea."

Eight years later, MAID was looking to raise financing to expand further. The market for business information was growing rapidly, and few competitors were offering specialised services. The initial public offering was particularly popular with US investors, a fact that doesn't surprise Mr Wagner.

"The US understands us better, and that is because of the omnipresence of on-line services in America, both in business and in the home. Last year, for the first time, PCs were the dominant home appliance in US homes. They were spending more time using computers than they were watching television."

While MAID had already lined up strategic links with Adobe, the presentation software company, and Hayes, the world's largest manufacturer of modems, it was the Microsoft link that most excited investors. By 1996, MAID's range of business information - including company reports, stock information, sectoral reports from brokers and other sources - will be accessible on the Microsoft Network, likely to have as many as 9 million customers by next year.

Mr Wagner promises more from the Microsoft alliance: "This is not just about content provision," he says. The two companies will work together on developing additional services, particularly for use in the small office- home market.

Mr Wagner is pragmatic about the information revolution. He thinks too many companies have been spending too much on technology and businesses that have yet to prove their worth. He prefers to wait until the dust settles before committing himself.

"We are the guys who shoot the pioneers in the back, not the pioneer who gets shot. We're not going to work hard to create something, and then have someone else say, 'Oh that's good, we're going to do that'. We prefer to come into the market a little bit later, more polished, more professional, hopefully.

"You would never seen out of us something completely new. With MAID, I was not an innovator: I saw a chance to carve out a niche, which is what I did."

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