Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com. And it's featured guest time on the show and I'm very pleased to have a guest that has been on my target list for quite some time because I'm visiting with Scott Jones, Founder and CEO of Cha Cha. Scott, welcome to The BusinessMakers Show.

Scott: Well thanks for havin' me, Russ.

Russ: You bet. Let's start with you telling us about Cha Cha.

Scott: So Cha Cha's this really cool service that you can use from your mobile phone or online and you basically text 242242 but not while you're driving – or you can go to chacha.com and soon, you'll be able to ask via Facebook. You can ask via Twitter right now, @chacha and you can ask any question you want and get back an answer sometimes within ten seconds but almost definitely within a couple of minutes and the way we do this is we're like your smart friend. We're that friend that you can text or call – you can call it with – at 800-2-CHA-CHA. Let's say you text in your question and your smart friend, Cha Cha, answers on any topic you want. But the way we're doing it is combining technology with people all over the country that are in their dorm rooms or working from their living room. Might be a retired person with a wealth of knowledge about nuclear physics or it might be a college student who can answer a relationship question. Or why is the sky blue or what's the meaning of life. So you can ask absolutely anything. Quick story – I was – came back through – I live in Indianapolis and I was coming back through Chicago and they cancelled my flight late at night and it was storming outside and I called Hertz and they pulled up a car, lights were on and, and windshield wipers were on. I get on the highway and people are beeping at me and I couldn't figure it out at first but then I realized my emergency blinker lights were on.

Russ: Okay.

Scott: And I think I'm gonna have to get off at the next exit. But I think, "Well, I'm CEO of this company. I should call and ask."

Russ: Right.

Scott: So I call and I ask in this XYZ vehicle, I don't remember what it was, how do I turn off the emergency blinker switch and within 30 seconds it messaged me back and said, you know, "Red switch, top of the steering column," in a place I could not see, and I got it turned off.

Russ: Great story. So any question.

Scott: Any question.

Russ: Yeah, I mean I could text in and say, "Who was the governor of South Dakota in 1920?"

Scott: Yeah. Absolutely.

Russ: And I'd have an answer immediately.

Scott: Absolutely.

Russ: Whoo! How much will this cost me?

Scott: It's all free. So that's what's incredible. There are some paid services out that try to do what we do –

Russ: Yeah.

Scott: But we're actually faster, better quality and free. So the way we support this is via advertisers. We sneak in a little text ad. Our users seem to like it because it, it actually usually goes along with the question. So it's a great platform for users to get their answers and it's also a great platform for advertisers to get their messages seen and especially with teens that are not involved as much in the traditional TV, radio, newspapers. In fact, Nielsen just put out data that shows we are second only to Facebook on mobile phone text for users interacting with us.

Russ: Wow.

Scott: According to Quantcast, and the country. We're now ranked, I think, about 80th.

Russ: Congratulations.

Scott: And, and – thank you. And fastest climbing, too.

Russ: Okay. Fantastic. Well now, you said the ads, did you say it syncs up with the text?

Scott: That's right. So if you asked about a Thai restaurant and then while you're waiting for your answer, will send back a confirmation ad that basically says, "Hey, we're working on your question and here's a word from, you know, a sponsor."

Russ: Yeah.

Scott: And –

Russ: A Thai restaurant.

Scott: – in text. And in 160 characters or less.

Russ: Wow.

Scott: And then we return the answer to the question that you asked and there's even a tiny ad, you know, a 20 character ad, that at the end of that answer.

Russ: Okay. Well, then there must be some system decision-making process about who gets what question.

Scott: That's the technology that we built. We have this hub, this traffic cop, that is deciding when you ask a question who should we get to answer that question about the Thai restaurant in Houston or who is a history buff in South Dakota and so were actually popping information onto their screen and were looking for an expert who knows something about the topic. So they can very quickly mediate this information. So it really is like getting a smart friend on practically any topic that you can imagine.

Russ: Okay and then I assume that some of them are just fast people on the web at finding answers to miscellaneous questions.

Scott: That's right. Yeah, we call them generalists. So there's actually a bunch of different people behind the scenes.

Russ: Yeah?

Scott: A lot of different roles. We call these people Guides in our system and so if you call and ask via your voice, we actually have transcribe it into text. Then we have what's called an Expediter that can triage your query and figure out, "Hey do we have this in the database? Has this question been answered before? Can we get it from a feed?" You know, if it's weather, sports, stock quotes, that kinda thing comes in through a feed. Or, "Do we need to engage a specialist?" And if we don't happen to have a specialist, which often we do – but if we didn't – then we'll look for that reference librarian. We call that a Generalist Guide.

Russ: Cool. We're talking with Scott Jones, serial entrepreneur and now Founder and CEO of Cha Cha and we'll be back with more with Scott after this. You're listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.

[Aflac Commercial]

Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com and I'm in an interesting interview with Scott Jones, serial entrepreneur and Founder of Cha Cha. Now you're just talking about this incredible force of human beings that you have on the other end of the questions – the people that are actually answering the questions. Is that a pretty cool job to have? I mean you're working at home and how's the pay work?

Scott: Right. So we have a number of different roles. So these Guides behind the scenes do different things and they get paid different levels, depending on what they're doing. And we have multiple payment mechanisms so you can earn cash. You can earn points which also turn into cash. It's a very rich, robust system for doing that, and interestingly, you get what's called the Cha Cha debit card and the payments actually go to that card instantly and so you can do pay me now or you can be on the pay me monthly plan. But some people do this for the money. Other people do it because it's kind of like a game of Jeopardy. You know, it's very game like on the other side in handling all of these questions and being helpful to people.

Russ: Yeah.

Scott: And like I said, there's relationship questions or there's homework questions. There's direction, you know, finding directions to things or finding out what's good on a menu or once you find the pad Thai is good, you know, on the Thai menu, how much sodium's in it. Or how many calories.

Russ: Homework questions, though? I could be sitting –

Scott: We get a lot of homework questions.

Russ: High school algebra.

Scott: Yep, yep.

Russ: And not know how to –

Scott: Yeah, it can do all of that. You know, interestingly in classes, at first when teachers found out about it, if they didn't already have cell phones banned, they banned them when they heard about Cha Cha.

Russ: Sure. Could be taking a test.

Scott: But, but it's turned out that a lot of teachers have sort of reversed on that and said, "You know what, just keep your phone on the, you know, the front of your desk where we can see it. If I ask a question and none of the students can answer it," then the teacher will let, you know –

Russ: Let 'em look it up.

Scott: – let 'em start to use Cha Cha.

Russ: That's great.

Scott: And then because the point is do you really need to remember everything –

Russ: Right.

Scott: Have it by rote memory, or do you really wanna be doing problem solving? So get the data when you need it and then let's talk about it.

Russ: Right.

Scott: Let's figure out not when the war started but why the war started.

Russ: Right. Cool. Can you ask a question that might have like a paragraph as an answer?

Scott: Some, like you can ask for lyrics for music. You can ask for directions. Those typically don't fit in your 160 characters of test.

Russ: Right.

Scott: So we'll give you multiple messages back. And in the cases where there are pages of answer, we often give you a web link which works on many cell phones or you can go online and type it in.

Russ: Now I know people that heard the beginning of this interview that are now really tuned in. Didn't hear the text number, again what's that number?

Scott: Yeah, you text 242242 and the really cool thing about Cha Cha is you may have a smart phone, an iPhone, a Blackberry, a Droid and Cha Cha works great – in fact we find that we get about ten times as many questions per user per month on smart phones but if you don't have the very smartest phone that's out today, you can use it from absolutely any phone.

Russ: Okay.

Scott: That's what's really cool about it. And it will text you back with the answer, whether you text 242242 or whether you call 800-2-CHA-CHA.

Russ: Okay. I'm really fascinated by the workforce that you have out there but I'm curious. How many total employees are there with Cha Cha?

Scott: Well, so the workforce – they're more contractors –

Russ: Right.

Scott: – than – they're not employees.

Russ: So how many contractors are there?

Scott: So we've had over 50,000 sign up to do this work and it depends on, you know, how you classify it. So they can choose what they wanna work on, which type of questions they wanna answer. They can choose when they work and so some people do it every day and in fact many hours a day, and other people might come on every once in awhile in a month or even in a quarter. So we've got typically in an average month, we've got about 10,000 that are actively engaged in answering these questions.

Russ: Can they answer 'em on their cell phone?

Scott: Not yet. But –

Russ: They have to be on a computer today.

Scott: Yeah, because you know when you've got that smart friend mediating the information, you really want them to have that rich –

Russ: Right.

Scott: – ability to surf around and find things.

Russ: Right.

Scott: And they're usually in their topic area.

Russ: Right.

Scott: so that's how we do it right now but we are actually contemplating the idea of letting people answer it via their cell phone and other mechanisms.

Russ: Wow. Cool. So I mean I guess you sorta have to watch the volume of incoming. I mean sometimes are you sitting there and it's Tuesday night and you only have 500 people working and something happens and the volume goes up and you have to call people in?

Scott: Yes, that's exactly what happens. So we monitor that in real time and when we notice that we're getting tight on Guides, we're firing off messages via text, via email, to these Guides and saying, "Hey we need you online," and they get on right away. So it works exceptionally well.

Russ: Cool. Now I happen to know a little bit more about the history of Cha Cha and originally the primary search engine chacha.com. Share with our listeners that story and how that worked and how it works today.

Scott: Right, so you know you talk to a lot of entrepreneurs and you know one of the main things that I always talk about is you gotta be nimble and so we got out there with what we thought was a really cool idea, which is get humans involved, human intelligence involved on specific topic areas where somebody could actually help you online is kinda like going to one of the top search engines, but having somebody there to help you alone.

Russ: Right.

Scott: Well it turned out it worked pretty well, especially for homework questions.

Russ: Right.

Scott: We had a lot of kids coming to us for that.

Russ: Right, right.

Scott: However, there were many more people who said, "Hey I don't wanna get out of the driver's seat. I know what I'm doing on Google and Yahoo and –

Russ: Right.

Scott: – Microsoft Bing at this point, but you know, I know what I'm doin'" and even if we had an expert who could get their information for them in 30 seconds instead of them having to hunt and sift and research for 20 or 30 minutes or in some cases days on certain health questions –

Russ: Right.

Scott: – even if we could help like that, people didn't perceive it as much added value.

Russ: Right.

Scott: So we decided two years ago to shift our thinking and we put it on mobile phones. So you could ask that same question but on a mobile phone and now it's much, much harder, even on the best smart phones, iPhones, Blackberries –

Russ: Right.

Scott: You know, it becomes –

Russ: To do it through the web, right.

Scott: – yeah, to do something through the web –

Russ: Right.

Scott: So even if you're using Google on an iPhone, that's not a particularly great experience.

Russ: Correct.

Scott: Whereas if you've got that smart friend, Cha Cha, that you can text or call –

Russ: Right.

Scott: And get them to find the information.

Russ: Right.

Scott: Send you the answer instead of dumping a million results in your lap in a split second –

Russ: Right.

Scott: – which isn't useful on a cell phone –

Russ: Right.

Scott: – especially when you're walking around the mall or driving around or whatever. So when we shifted, all of a sudden it took off in a very big way. So our growth has been like a rocket ship since we took that turn. And then we found recently putting that same data for mobile phones online, that turns out to be really interesting. So now we've gone back to, you know, at the beginning of this year, January, we put that data online and we are now the fastest-growing website in the top 100.

Russ: So chacha.com, using it as a search engine is benefitting from all the text interaction with consumers that are texting in?

Scott: That's right.

Russ: Cool. Really cool.

Scott: Real time and it's mobile and it's local.

Russ: Real cool. I'm talking with Scott Jones, serial entrepreneur and Founder of Cha Cha and we'll be back with more with Scott after this. You're listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.

[Aflac Commercial]

Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com and I'm definitely in a cool discussion with a serial entrepreneur, Scott Jones, today most known as the Founder of Cha Cha and Cha Cha sounds so cool but I keep announcing you as serial entrepreneur. Let's go back to the beginning. What was your first big success story?

Scott: So the big success story – I used to be known as Mr.  Voicemail and I started a company with co-founder Greg Carr. He was at Harvard; I was at MIT's Artificial Intelligence Lab and we decided to start this company in telecom at the time when divestiture of AT&T was happening.

Russ: Right.

Scott: There were other entities, VMX, Octel, AT&T were all in the business of voicemail but what I did is took a step back and with fresh eyes and created a very scalable, easy to use, inexpensive system, built by stringing together a bunch of PCs and putting them in a refrigerator-size box and selling it to the big phone companies, both in the U.S. and internationally. So we went from, you know, in our second year I think we were doing about $2 million, so not too much and we had a 1,000 percent growth the next year. We were doing $20 million and it took off from there. When we reached about $200 million in revenue, we merged with another company of about $200 million called Comverse they were stronger, actually, in sales than we were but we were stronger in technology. So many of my patents are still being used within that context and there are over a billion subscribers around the world.

Russ: Okay, well I know there's more, so what after that?

Scott: Well so then I, I did Boston Technology out in Boston and then I moved back to the Midwest where I grew up and started a company called Escient and I was trying to put together the entertainment furnace for the home and we had some great products, mostly at the high-end of the market and actually acquired about 13 little technology companies and distilled it down into five operating companies but the crown jewel of them all was a company called Gracenote, which you might notice from the dashboard of, you know, Lexus and some other car manufacturers –

Russ: Right.

Scott: It's on a lotta cell phones and it's what powers iTunes, Apple's iTunes –

Russ: Cool, cool.

Scott: For discovery and Gracenote's the thing that names the tracks and the album and gives you the artist information.

Russ: Cool.

Scott: And I sold that last year to Sony. We sold that for $260 million.

Russ: Good price.

Scott: And there's a – yep. And one of the guys who helped build that company, David Heiman, has a new spin out and I sit on the board of this company called Mog. You gotta check it out. It's better than Pandora and everything else that's out there.

Russ: M-O-G?

Scott: M-O-G. Go online and you'll see what I'm talking about.

Russ: Okay.

Scott: This is better than Rhapsody. Better than Pandora and it's a good way to discover new music.

Russ: Cool.

Scott: And it has access to over five million songs and it's 5 bucks a month for a subscription service so rather than spend your 5 dollars on 99 cents a track, why not get access to 5 million songs? So.

Russ: Sounds like it makes sense to me. Now, you're so focused these days on Cha Cha – do you have other ideas that are just constantly surfacing?

Scott: Yeah. I have plenty of ideas. If you go to galaxialighting.com you'll see the video images of our lighting company where you can throw Christmas tree lights up on the tree or on a fence and they will automatically map in real time and you can send videos to your bush or tree or fence. So that's my latest thing that – I actually start these things in what's called the Yellow House on my property.

Russ: Okay.

Scott: It's a little incubator.

Russ: Okay.

Scott: Before that was the robot that we built to compete in the DARPA Grand Challenge so a 6,000-pound robot runs 90 miles an hour, not by remote control. It finds the road and can tell the difference between a rock and at tumbleweed and avoid cattle and – and then we turn that into a golf course greens mowing lawn mower and it turns out that that market is a multi-billion dollar market, worldwide. Every year and golf courses couldn't do without their greens, right?

Russ: Right, sure.

Scott: And so we created a lawn mower that precisely mows each blade of grass on the lawn. It's a very interesting technology. That's precise path robotics. You can check all these things out at scottajones.com.

Russ: Great. Well we're out of time for the radio broadcast but I'd love to continue this on a web extra. Do you have a few more minutes with me Scott?

Scott: Sure, sure.

Russ: All right. We've been talking with Scott Jones, Founder of Cha Cha and a whole bunch of cool companies an we're gonna continue this at thebusinessmakers.com. So just go there and look for the Scott Jones Web Extra. You've been listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com.