ENTREPRENEUR WATCH

Mark Klein was a theoretical physicist at the University of New Hampshire in the early 1970s when he became intrigued by computers. Klein, who got his undergraduate degree in English at the University of Pennsylvania, joined another UNH professor to build a computer at the dawn of the microcomputer age. He and his partner sold that first creation - which had at the time an astounding memory - and Klein left academia behind. He launched a career as a "serial entrepreneur" which not so coincidentally matches the explosion of the Information Age. He has started and sold three successful companies - IE Systems, Channel Computing and Edge Research. As a result of one of the sales, Klein spent time as an IBM executive, which he says was immensely helpful in his development as a manager and entrepreneur. Klein's latest venture, Portsmouth-based Loyalty Builders, may prove to be the most successful of them all. Founded in 1999, Loyalty Builders analyzes customer transaction data with complex mathematical algorithms to help predict customer buying patterns. Microsoft was one of its first clients and the software giant continues to call on Loyalty Builders to help it retain its customer base. Loyalty Builders has 12 employees and Klein predicts that will double in the next year as more companies learn to target their marketing efforts more precisely.

SV:  : What's the best thing about being an entrepreneur?

MARK KLEIN:  Being a builder. I love to build and it's been that way since I was a kid and built a steam locomotive from scratch. I'm a builder.

SV:  What else have you learned?

MARK KLEIN:  Being a builder. I love to build and it's been that way since I was a kid and built a steam locomotive from scratch. I'm a builder.

SV:  What's your ideal employee?

MARK KLEIN:  They are smart and have good character. We want ethical people who love to work hard. We have different sets of interviews for prospective employees. The first is to see if they are qualified to do the work and then we have "vibe testers," employees I trust to see if that person has the right vibe to work here. I believe we have been successful with that approach.

SV:  Why is this such a revolutionary approach to marketing?

MARK KLEIN:  We have filed patents for our software that helps calculate and predict customer loyalty six months in advance. We can even predict which customers are likely to defect. If you don't have this information, then your marketing efforts are likely to be much less effective because you are shooting blind. We believe that marketing without predictive analytics is like Christmas without Santa Claus or the (Grateful) Dead without Jerry (Garcia).

SV:  What's you success rate?

MARK KLEIN:  It runs pretty high. For one client, we recently predicted a 30 percent customer buy probability that turned out to be on the mark. We calculated it was 10 times better than random marketing strategy

SV:  How do you market Loyalty Builders?

MARK KLEIN:  Public relations is our main vehicle. We do some advertising but we are big believers in a vigorous public relations. We have an outside PR agency and we write a lot of bylined articles and strive for story placement in trade publications. We have drawn the attention of the Wall Street Journal and could be in one of their Tech Talk stories.

SV:  What did you learn while working for IBM?

MARK KLEIN:  I learned how to break the micro managing habit of mine. I learned what I was good at and that there are lots of things I'm not good at. I'm bad at product design but good at entrepreneurial vision. I realized I was too involved in the details of too many decisions. I now hire people to make the right decisions.