This story was first published Feb. 2, 2011 and republished Jan. 8, 2021, upon Equifax’s purchase of Kount Inc.
Brad Wiskirchen says he’s a fortunate man.
At 42, the Boise native runs Keynetics, a holding company, as well as its subsidiaries ClickBank, an online retailer of digital goods, and Kount, a provider of fraud-fighting technology.
The privately held companies provide e-commerce opportunities and online security to thousands of people and companies worldwide. Wiskirchen said ClickBank gross sales topped $400 million last year, and he expects revenues at both companies to keep climbing. The companies employ 120 people — 80 in Boise and 40 in Broomfield, Colo. He declined to disclose Kount revenues.
Wiskirchen meets with the biggest players in the financial industry, hobnobs with the creators of the latest technology, and raises his young family in Boise, where healso donates his time to nonprofits, social causes and educational boards.
“I got the best gig on the planet,” he said in this interview, which has been edited for length and clarity.
Q: Can you explain ClickBank?
A: ClickBank was founded in 1998. It’s the quintessential garage technology venture, because it was literally founded in the garage of Dr. Tim and Eileen Barber in San Diego, Calif. They walled off a space in their garage, dry-walled it, and hired their next-door neighbor as their first customer service rep.
They started the business with an initial investment of $125,000. That’s the only outside investment that’s ever been taken by the company. We don’t have any venture capital backers, any private-equity backers. Never had any debt. Just kind of ran it belt and suspenders, and grew it.
In 2000, they moved it from San Diego to Boise, because one of the board members is a Boisean. Bayless Manning, he was dean of Stanford Law School, president of the Council on Foreign Relations – done a lot of things – he lived here. When it came time to start hiring more employees, they looked at it and said San Diego’s not the most cost-effective place to grow a business.
ClickBank’s an e-commerce platform. It provides entrepreneurs with an opportunity to get their products into commerce.
For example, let’s say you’ve written an e-book on how to attract hummingbirds to your yard. It’s a 40-page book. You’ve sent it to all the publishing houses. They’ve said, probably a little bit too much of a niche for us, or maybe not long enough – needs to be more than 100 pages: “We’ll respectfully decline, although you’re the greatest thing to writing since William Shakespeare.” You’re at a loss at that point.
So what you can do is put your book in a digital content format, PDF perhaps. Then you apply to have your book distributed through ClickBank.
If we accept it, assuming it meets our acceptable-use policy – and there’s a lot of things we don’t do, adult content, things like that – if we accept it, then it’s placed in our marketplace. You then have an e-book with a pitch page, with a page explaining it, trying to get consumers to buy it.
But there’s so much noise on the Internet, you can’t get anybody to buy your e-book on how to attract hummingbirds to your yard. What happens with ClickBank is we have this affiliate network, which are online marketing experts, and we have over 100,000 (who) have facilitated a transaction in the last year.
They notice your book. They notice that you pay a high commission rate for people who promote your book, sell your book. It doesn’t cost you anything, right? ‘Cause it’s an e-book. Didn’t cost you anything to print it. So you can give commission rates up to 75 percent. They start sending traffic to your pitch page that explains why (people) should buy your e-book on how to attract hummingbirds to your yard. People buy it.
Q: What about Kount?
A: Kount basically arose out of necessity. ClickBank is a very large online retailer. Right now, we’re doing more than 30,000 transactions a day. Sometimes we’ll hit 45,000. We do a lot of transactions daily, and it’s a digital-goods site, so it’s a test site, which means you don’t have to enter in a lot of data. There’s no shipping address ‘cause there’s nothing to ship. Bad guys on the Internet can take digital goods sites, and they can test credit cards.
The best example I can give of a test site is probably in the brick-and-mortar environment. Say you leave your credit card at a restaurant. It’s picked up by a crook. And the first thing he does is, he pulls into the Chevron station, plugs the card into the gas pump to see if you’ve noticed yet and canceled the card. Why does he do that? Well, nobody’s going to cuff him out there at the pump, right? So he sees if the card’s still good. Then he can go to a local store, buy a laptop computer or whatever, and fence it at a pawn shop, or however they decide to fence it. So in the e-commerce space, digital-goods sites are that way. You don’t have to plug in a lot of information. If you get access to a stolen credit-card number, you can test it and see if it’s a valid credit card.
ClickBank, being a large retailer of digital goods, is a prime target for such nefarious activities. We were in the Internet in the early days. We had to develop technologies to help protect us against those things. And Tim Barber, the founder, is a Ph.D. in mathematics from Princeton. He happens to be perfectly suited to create solutions to find bad guys on the Internet. So he did.
Out of our ClickBank experience grew a strong expertise in fraud control. In 2008, we rolled out a stand-alone company with a stand-alone product in this space. One of the most commonly used tools in fraud control right now throughout the Internet is something called device fingerprinting, where you’re able to identify devices, etc. Actually, Tim invented that and patented that in 2000. He’s kind of a pioneer in the fraud space.
But Kount is a lot more than that. We evaluate hundreds of parameters with every transaction to evaluate whether it is good or not, and then in real time respond to a merchant. We give them a score back and tell them whether a transaction is likely to be good or not, and they can decide if they want to accept that transaction.
We also patented proxy-piercing technology. It can tell if your computer is being used by another computer in a different country to purchase goods in real time. It’s a lot of computing.
We work with some of the biggest players on the Internet. Chase Paymentech, they process roughly 50 percent of the world’s online transactions. They’re partnering with us. We’ll be their white-labeled solution on their platforms. They’re rolling that out right now. We’ve also got a partnership with LexisNexis, a large information aggregator. We have large online retailers that use the Kount solution as well. Staples, the No. 2 online retailer in the world second only to Amazon.com, uses Kount. It’s a nice little company.
And it’s a big problem.
Q: How big is ClickBank’s potential?
A: We continue to grow very rapidly. We had double-digit growth in 2010, which a lot of people can’t say. We’re projecting pretty rapid growth this year.
The limit’s really the number of people with Internet access, the number of people with unique ideas. Everybody is perhaps the expert at something. It could be how to improve your golf swing. It could be how to train Doberman pinschers. It could be how to attract hummingbirds to your yard. We help people turn their avocation into a vocation. If you can make a lot of money doing these things – and people can make a lot of money doing these things – if you can produce quality content about a thing that you’re most passionate about, then there’s other people in the world who are passionate about it. But they may not have the level of expertise you have.
Q: What categories make the most sales?
A: It depends. It’s very cyclical, and it’s seasonal. When the economy’s bad, products helping people make money or optimize their investments are hot. In January, products that relate to physical fitness and weight loss are hot. Every little micro-niche, people start generating products relating to it. Whatever’s hot in the U.S. economy, e-books and software relating to those challenges pop up.
And it’s remarkable to me how quickly a product will pop up that kind of mirrors what’s going on in the economy.
For example, when energy prices went through the roof a couple of summers ago, e-books on how to build solar panels in your garage started to sell like crazy. I thought, “Wow, how to build solar panels in your garage,” but it makes sense. People are concerned. They can’t afford this anymore. They think, “(I) need a solution and can’t afford to pay someone else to put solar panels on my house, so I’ll start doing some homework and see if I can do it myself.”
An interesting one that I noticed last year was a lot of e-books relating to how to raise chickens if you live in the city, how to build chicken coops, how to optimize your chickens’ output. Things like that.
Wow. Who’d ever thought you could sell e-books in these kind of volumes on topics like that?
Q: Which areas have the potential to become hot?
A: I think we’re going to see more video content jumping up. More and more people are getting their information/data from videos right now. We’ve actually partnered with iAmplify to facilitate that. They’re an aggregation point for expert video content in New York City.
Social gaming – I suspect we’ll see a lot more of that. We entered into a partnership last month with Big Fish Games, a very large provider of social games. I believe their average consumer is female right around the 40-year-old age. When you think games, you think teenage boys. But these are social games relating to organization and organization tools, etc. We’ve partnered with them because I think that’s going to be a trend on the rise, too – people trying to get data and information or tools, data to optimize their day, but in a fun way.
Q: What’s your best advice for people who want to succeed at it?
A: Everybody asks me that question. My answer’s remarkably unremarkable. It’s the same as everything else in life – do your homework. The people who succeed are people who put time and effort into ensuring that their product is quality. We have a very aggressive refund policy that we adhere to very strictly. If the consumer doesn’t like your product, we’re going to issue a refund. The time frame is if they don’t like your product in 60 days, they get all their money back, no questions asked.
You’re not going to make a lot of money if you don’t have a quality product.
It means you’ve got to do your homework on niches, what’s selling. Come to our marketplace. We have statistics we give people, and you can figure out what’s selling and what’s not selling. You may have a product that’s already made, or you may be just investigating our marketplace to try to find something for yourself to research and write an e-book on, or create a membership site related to it. The fact of the matter is you’re going to succeed if you do your homework. There’s no replacement for good, hard elbow grease.
Q: What’s the next big thing on the technology horizon?
A: There’s going to be a lot of big innovations this year. The iPad kind of changed people’s world. It did for me. It’s a lot easier carrying around a device that’s a pound and a half as opposed to my 5-pound laptop. And I travel a lot, so that made a big impact on my life.
In the not too distant future, we’re going to see things we just chalk up to sci-fi. I’ve seen demos of technology where the keyboard is projected onto the desk top (or table). All kinds of devices we’ve seen in the movies the last half dozen years, they look really cool. (We’ll be able to) manipulate frames which are in the air. We’ll see that, and in a shorter time frame than most people would believe.
What you have to be prepared for is a world where more and more transactions, more e-commerce is conducted using mobile devices. I’ve seen figures that … the number of transactions on mobile devices will surpass the number of transactions online via desktops as early as 2013. So the software companies and the Internet companies are going to have to prepare themselves for that, for serving up order forms, etc., that are easy to use on mobile devices, because more and more people are going to have access to them. It makes sense because they’re less expensive and easier to integrate than buying a computer.
Q: Anything else you’d like to add?
A: Really, I feel fortunate. We have two morally compelling companies. They’re both morally compelling for different reasons, which is what got me to join this company in February of 2005 and has kept me excited about it and passionate about it since. Kount because if you ask my two young children, “What does your dad do?” my 6-year-old daughter says, ‘He catches bad guys on the Internet.’ And that’s kind of what we do, and she’s really proud of that. On ClickBank, we give everyone the opportunity to publish their voice. We’re the great equalizer. Not all products sell, not all products sell well, not all affiliates are experts in your field or can promote your product, but we give you a shot.
I’m surprised at the things that sell well. I mean, teenage boys who sell books on how to beat video games. Never have to worry about them getting a college scholarship because it’s paid for, right? A high school teacher who ran really good camps for his high school and college students. He started running how to run your soccer practice, how to run your softball practice, on e-books, and he makes far more annually on these e-books. But it enables him to do what he’s passionate about, which is teach. I feel very fortunate to be able to run these companies and run them in Idaho and Broomfield, Colo., two great places to run businesses.
I get to do it all and come back home to Boise, Idaho, and have a team that is able to ride their bikes on the Greenbelt to work. I work with great, great people that I get to see everyday. We’re all very passionate about success and running a business, and doing it the right way. We do the right thing because it’s the right thing to do, no matter what the consequences.
Affiliate marketing and Clickbank: How they work
In online affiliate marketing, a business or individual compensates people who use websites and other marketing tools, like publishing reviews of products and services, to drive customers to a seller’s website.
ClickBank.com is an online market offering e-books, software and membership sites. It does business in 200 countries a day around the world in several languages, including German and Russian.
The company says it has 110,000 active affiliates. They helped sell 46,000 digital products in 2010. Vendors and affiliates received $1.7 billion. ClickBank says it is seeing sales growth in the 40 percent range year over year.
Vendors pay a one-time product activation fee of $49.95 for the first account opened, which allows one website, called a product pitch page.Each additional account/website created costs $29.95. Vendors can offer up to 500 products under a single account on one website. For separate websites, vendors can open other accounts.
Affiliates receive up to 75 percent commissions from vendors on sales.
Prices: The average cost of a ClickBank product is $42. The standard policy limits prices to $50. Vendors may request price limit increases, which are reviewed case by case. ClickBank has products listed from $1 to $999.
ClickBank fees: The standard transaction fee is 7.5 percent plus $1. The fee is 9.9 percent for recurring subscriptions priced less than $40. ClickBank’s fee on a $42 transaction would be $4.15. The vendor would get $9.46, and assuming an affiliate generated the sale, that person would receive $28.39 if the commission were 75 percent.
Wiskirchen off the job
Family: Married, two children.
Hobbies: Fly fishing, skiing, new technology and reading.
Former employment: Partner at Holland & Hart LLP in Boise.
Education: University of Notre Dame Law School and Brigham Young University
Past boards: Caring Foundation for Children, Opera Idaho, Idaho Small Business Development Center, FUNDSY, Boise Metro Chamber of Commerce, Discovery Center of Idaho and Idaho Software Employers Alliance.
Leadership now: St. Luke’s Regional Medical Center, Strategic Initiatives Committee, Suicide Prevention Action Network of Idaho, Boise State University’s Division of Research Office of Technology Transfer, and BSU College of Engineering Advisory Council.
What would he like to have most?
“If I could own anything on the planet, it would be the full 20-volume set of the Oxford English Dictionary. One of my favorite books is ‘The Professor and the Madman: A Tale of Murder, Insanity, and the Making of The Oxford English Dictionary,’ by Simon Winchester. “
Support for Boise State: “I went to BYU and Notre Dame, interesting combination. I guess it’s because I want to be religiously ambiguous. Neither of them are here. Education’s important to me. So I’ve been provided an opportunity to help the educational institution that’s in our backyard.”
Wiskirchen named to Federal Reserve Bank regional board
Brad Wiskirchen was appointed a director of the board of the Salt Lake City Branch of the Federal Reserve Bank of San Francisco on Jan. 1, 2011.
Q: What are your responsibilities?
A: Branch directors contribute to monetary policy development, and they serve as a link between the Federal Reserve and the private sector. What we do is we provide information on current economic conditions, and we actually provide a lot of information on emerging developments in our regions or in our verticals.
For example, I would be providing information on what’s happening here in Idaho, and also what’s happening in the Internet and digital media, particularly because that’s what I know through ClickBank and Kount.
We provide the directors of the parent bank with data to help them prepare for their discount rate vote. We meet monthly. Our branch meets in Salt Lake City. Then periodically we meet in San Francisco at the district office.
We also have the opportunity to go to (Washington,) D.C. on occasion to meet on a broader scale. I’ll still be in Idaho. It’s one-day trips, but it’s an exciting opportunity for me to learn. I’m going to learn a lot.
Q: How do you believe you can make a difference?
A: A lot of ways. Our companies are in a unique sector. We see things that maybe others don’t. We see emerging trends before a lot of others do.
The man who led Keynetics to Boise
Bayless Manning, 86, dean of Stanford Law School from 1964 to 1971, was first introduced to Boise when he visited Stanford alumni in the area to boost support for the school.
“They planted the idea in my mind that Boise was growing and had potential,” he said.
Manning graduated first in his class at Yale Law School in 1949 and was editor-in-chief of the Law Journal.
He was a Yale faculty member from 1955 to 1964, directing a New York City Bar Association study on federal conflicts-of-interest laws. After 1960 he served on the President’s Advisory Panel on Ethics and Conflicts of Interest in Government. The study and the panel were the foundations of reform legislation enacted in 1962. The U.S. Office of Government Ethics for the Executive Branch honored him with a Certificate of Meritorious Achievement for that work in 2001.
Manning wrote several articles on corporate law, one of which led to statutory revisions regarding stocks and mergers. His writings also spurred states to rewrite their rules on legal capital requirements.
Manning left Stanford to become the first full-time president of the U.S. Council on Foreign Relations in 1971. He then joined the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison.
He later traveled as an adviser to various companies around the world. He moved to Boise in the late 1980s.
One enterprise he learned about while doing consulting work in San Diego was Keynetics. It was still a three-person garage operation. “They seemed very interesting,” he said.
He joined its board. When Keynetics anticipated growth and needed a bigger home, “I suggested there were a lot better places than a garage in San Diego.” He said Boise was a more cost-effective place to grow a business.
So the company moved here in 2000.
In Boise, Manning helped form the Warm Springs Historic District Association.
Editor’s note: Bayless Manning died Sept. 18, 2011, seven months after this story was published.