The team members are drawing on their extensive experience in online banking and direct marketing to become what they hope will be the clear leader of Internet banking. To achieve that, they plan to combine strategies that worked for others with their own innovations.

The big question, of course, is why will Juniper succeed when no one else has? And the bigger question is why will the Vague/Stewart team succeed when many believe it had failed in the past?

Juniper, in fact, is a revamped, the online banking venture of Chicago-based Bank One Corp. Wingspan has gotten a lot of bad press, helped by the bad-mouthing of it by John McCoy, Bank One's ousted CEO. McCoy blamed First USA, headed by Vague, and its Wingspan online banking unit, headed by Stewart, for the bank's profit woes.

But supporters of the Vague/Stewart team say Wingspan was stifled by Bank One's slow-moving bureaucracy, which prohibited the team from fully executing its strategies. Now that they are on their own, Vague & Co., with the backing of the deep-pocketed venture capitalist Benchmark Capital, will be able to move nimbly, they say.

But will Benchmark's initial $20-million investment be enough, considering that Bank One was said to have invested $150 million in Wingspan?

In a recent interview, Stewart said Wingspan never had $150 million. "It was closer to half that for the first year," he says. "Like every startup, we'll obviously need additional funding beyond the initial $20 million and will raise it as needed. For financial reasons, it's better to raise it as you go along rather than all at once."

Actually, Benchmark's investment in Juniper is far bigger than the firm usually makes in a startup. According to its Web site, Benchmark Capital usually invests between $3 million and $5 million in brand-new ventures, not $20 million.

Stewart says that despite potshots from its critics, Wingspan performed very well. "Within a short period of time, it has become the most successful (the largest and highest rated) of the Internet-only banks," he says. If it were a publicly traded company, its market value would be several times more than the investment made to date by Bank One (based on comparable valuations). Wingspan is not as large as originally anticipated because planned marketing expenditures were subsequently slashed due to Bank One's earnings shortfall."

A New Direction
But Stewart says Juniper's "marketing and product offering will be significantly different" than Wingspan's. Bank One focused much of its marketing on costly television advertising, while Vague and Stewart plan to use their expertise in direct marketing to promote Juniper.

Key to Vague's plans is to "make our product easier to use" and more consumer-friendly than its competitors. To that end, Juniper has hired a top-notch industrial design firm-- IDEO--to help design its site. The Palo Alto, CA-based IDEO designed the "Neat Squeeze" toothpaste dispenser for Procter & Gamble's Crest brand and the sleek Palm V handheld computer made by 3Com, among other big-name, successful consumer products. IDEO representatives visit homes and monitor peoples' living habits to determine what they want and need.

Vague says that in some respects, Juniper will look like other Internet-banking sites, but in other ways it will make "real breakthroughs."

"Simplicity" is the key, he says. Relatively little thought has gone into the design of most Internet sites, including online banking products. "They're more like brochures than a site designed with the customer in mind," he says.

In addition to a well-designed site and cutting-edge marketing, Vague and Stewart emphasized the quality of Juniper's staff. They ticked off the names of their key people:

  • Clint Walker, general counsel, who wrote privacy policies for Citicorp and First USA.
  • Ben Brake, director of marketing, who designed First USA's direct marketing infrastructure and led its customer acquisition efforts.
  • Regina Wallace, director of customer service, whom Juniper describes as the "original architect" of Wells Fargo & Co.'s successful Internet customer service division.
  • Mike Cortese, director of technology, who led the Internet technology initiative at MBNA.
  • Bill Seligman, director of risk management and credit policy, who was chief credit officer for Bank One's consumer lending division, and who had run First USA's risk management and policy units, as well as its credit operations function.
  • Joe Venuti, director of business development, who had worked with First USA's 600 partner banks, insurance companies and brokerages.

Juniper appears to have lined up all the right pieces, but only time will tell if it has found the killing formula.

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