A picture may be worth a thousand words, but Rand InterACTIVE is betting that interactive pictures with sound, full-motion video and really cool graphics could mean big business for the Baltimore-based start-up.
Rand, lodged in an upstairs office at 1118 St. Paul St., creates interactive CD-ROMs that companies and organizations use to market new products or services. The CDs are designed to make a much bigger splash than such standard fare as color pamphlets, slide-show demonstrations or three-ring binders stuffed with page after forbidding page of grayish, jargon-laden text.
Though the business is very young -- it was founded in October -- Rand InterACTIVE is finding a receptive audience for its creative services. Founders John Snow and Todd Burgess are expecting the four-person, privately held company to have sales of $750,000 this year and $1 million next year, Snow said.
But Snow says interactive CDs are merely a springboard to a bigger potential market: the Internet.
Even top-of-the-line home PC modems would be too slow for the typical computer user to appreciate the kinds of presentations Rand puts together, if those presentations were on a Web site. But faster Internet-delivery systems are in the offing, and Rand wants to be ready to deliver two-way presentations when those fast systems arrive.
"When people discovered that they could send signals across a wire, Morse code was developed, and everybody learned Morse code," Snow said. "Then came voice, and radio followed out of that. Before long, they were sending pictures, too. Five years ago, the Internet was in the Morse-code phase. They're developing TV shows now. But interactive is the only way to deliver content."
Clients include Sylvan Learning Systems Inc., the Council of Better Business Bureaus, including BBB Online, the Army and Aether Technology of Owings Mills, which makes a system for tracking stock prices for wireless versions of the U.S. Robotics Palm Pilot pocket computer.
Among other prospects, a key one is a "national" Internet service provider, which Snow declined to name, that wants to add production of informational CDs to its plethora of offerings.
The Internet company might farm out some of the creative work to Rand, he said.
"That's the biggest iron [in the fire] -- and the scariest," Snow said. "We will be able to handle it."
The creative work on an interactive CD such as the ones Rand produces costs the customer $10,000 to $70,000 -- and sometimes as much as $100,000 -- and then about $1.50 to $2 each to reproduce and distribute. That may sound like a lot, but it isn't much more than a company would have to spend for the pamphlets or three-ring binders. And the interactive and image-oriented CDs probably deliver the customer's message much more effectively, said Eugene Fram, a Rochester Institute of Technology marketing professor.
"People will not read material, no matter how simple institutions make it -- and particularly when it gets technical and difficult. People lead time-compressed lifestyles," said Fram. "The population is more visually oriented. That presents [Rand's strategy] in a much more positive fashion."
Take the CD Rand did for the Army.
The Army was moving to a managed-care health program called Tricare, a big change that was expected to cause anxiety and confusion among participants.
The interactive CD was seen as a way to easily answer questions. Pop it into a computer, and up on the screen snaps a woman narrator and a menu of buttons to click on to get information on the plan.
The narrator -- in full-motion video -- explains the health care options and tells the user which menu buttons to click on to get information on each one. The CD guides the participant through the difficult process of choosing a health care plan and helps the user fill out an enrollment form, which can be printed out and submitted.
There's even a bit of humor. Put the pointer on the narrator, click the mouse, and she says, "Hey, don't click on me!"
Fram said it helps that the Rand CDs aim their messages at specific audiences.
Working against it are the demographics of the PC and Internet audiences, which remain dominated by higher-income, white males, said Fram, who has studied consumer use of the Internet.
Those demographics could limit the impact of the messages -- particularly when Rand moves its creative work from CDs to the Internet, Fram said.
However, the makeup of the PC crowd is changing rapidly, and the Internet is quickly becoming much more of a mass medium, he said.
Rand was formed by Snow and Burgess, who met while studying information systems management at Rensselaer Polytechnic Institute in Troy, N.Y.
Though they went to work for different companies after graduating in 1988, they had become fast friends, taking trips to the beach together.
Rand InterACTIVE had its genesis on one of these trips, when Snow spent most of his beach time reading a book about Macromedia Inc.'s Director software package, which made it relatively easy to combine sound, video and graphics into the kinds of interactive presentations the two men thought would take hold.
Snow created one such presentation for his employer at the time. But when the company decided to stay with print advertising, despite the customer's satisfaction with the CD, Snow decided it was time to venture out.
Burgess borrowed money from his parents to buy computer equipment, and the two were in business. Snow does the creative and technical work, and Burgess is charged with finding new business.
The biggest challenge, Burgess said, is getting potential customers to watch one of the CD presentations.
Once they do, he said, they're impressed and quickly become customers.
Business has been good enough to add two employees, and the company is looking for more with the right mix of creativity and technical knowledge.
Rand desperately needs people, particularly if it gets business from the Internet service company.
"We're not getting a lot of sleep," Snow said.
Pub Date: 7/09/98