Archive for the ‘Start-Ups’ Category

Listening: Why it is So Important in Social Media and 3 Easy Ways to Find the Time to Do It

This week’s guest post by Kyle Flaherty who writes a blog using insight, lessons learned and horror stories from his nearly 12 years in high-tech public relations, communications and marketing. He is currently Director of Marketing and Social Media at BreakingPoint Systems and of course you can find him on Twitter.

What’s the first rule of social marketing? Listen!

What’s the second rule of social marketing? Listen!

I first started thinking deeply about the concept of listening when I came across the term “lurker” at an event featuring Jackie Huba of “Church of the Customer Blog” and Society for Word of Mouth. The conversation came up in relation to stats that say 90% of folks involved in your social media activity are lurkers and 10% are active participants. Immediately the idea of lurkers turned into ‘listeners’ for me; people who are reading a blog, quietly joining a LinkedIn Group, reading Twitter and much more. Listeners are often your most dedicated readers and for your company they often become the most educated about your product and service and when they are ready to participate it is most likely as a qualified business lead.The best comparison is the person who walks into the auto dealership with a ream of printed materials from automotive websites, collected over a few weeks of ‘listening’, versus the person who walks in and just wants to talk with someone about their cars. The former is already in negotiating mode, the latter needs to go through the research stage in real-time, with a sales person who just wants to close. Which situation would you rather have, not only for selling, but for the customer experience? Well, what if the auto company was listening at the same time and had the new features and financing options that people had said they wanted on all of those sites. We just may have a match!

Listening is important and will set you up for success in your social marketing, if you are in any type of marketing role you must become a good listener because:

1. Listening is inspiring. Listening to your prospective community base will be the inspiration for the social media tools you use. Listening to our community on their blogs and microblogs led us to learn Ning and Facebook was of no value, for them, but rather LinkedIn was the key and we know spend a lot of time in that social network.

2. Listen before you jump. You must always listen to people first, for an extended period of time, before you jump into the conversation. For example; I have hundreds of searches within Twitter sent to me through RSS every morning, based on the pain points of our potential customers. I end up listening to these people on a daily basis, but often time take no action immediately.

3. Often silence makes the loudest noise. A great personal example is a person I listen to through his blog and his LinkedIn updates. Over the past two months I’ve learned about his pain points at work, his background, his skill set and more. He recently joined our LinkedIn group for network engineers and I could now easily reach out to him, set up a time to connect and listen some more.

4. Listening makes you a better communicator. I learned this one when I was actually in PR when my manager would tell me first to listen to how a reporter answered the phone. Was the reporter’s greeting a “hello” vs “yeah” or was the tone “speedy” vs “thought out”? I would then adjust my introduction accordingly.

The more you listen, in terms of quality of listening and quantity, the more you learn about your potential community and the better you will communicate with them in your efforts. However the question becomes how can you sort through all of the noise that is currently online. It is simply staggering to even sort through the noise on one medium like Twitter, however it is this medium that can provide you with some of the most important and impactful insights. I’m not going to write about ‘what’ you should be listening to, that obviously depends on your overall goals for Twitter, whether personal or business. Instead I’m going to go through three ways to better listen to Twitter conversations in order to get more out of your experience, consider it your Twitter Miracle Ear.

1) It’s All About the App: One of the great aspects of Twitter is the open API and the ability to use different applications when Tweeting (yes, the API restrictions are also horribly annoying, but that is another post). Originally I was on Snitter, moved to Tweetr, switched to Twhirl and now am devoted to TweetDeck…for now. I didn’t make changes for the sake of changes, in each case I need features and functionality that made listening to conversations on Twitter easier. The reason I’m now on TweetDeck is very simple; the ability to create personalized lists of conversations based on people or search terms. Using an app like Tweetdeck you can create a list of local people, sports-chat, social marketers or colleagues.  All of a sudden you have created a filter on top of the firehose that is Twitter and can really catch up quickly on conversations. I’m hoping that TweetDeck, or someone, adds some features to allow for easier reading of conversation threads, but the point is to use a variety of applications and find the one that can help open up your Twitter ears.

2) RSS Is Your Friend: Each morning part of my routine, as a social marketer, is reviewing thousands of RSS feeds, most based on Twitter search terms. It all starts over at Twitter Search, where you can put in any term that you want and generate an RSS feed to track in your reader. For any business this is a critical tool in tracking the conversation about your own company, your competitors, partners and more. One recommendation when setting up these searches is to use the same keywords you have gathered for SEO purposes or the terms people are using to find your website. You will end up refining this over time for sure, but getting these set up now will help you get in on the conversation as soon as possible.

3) Routine is Your Friend: Like working out or parenting, listening on Twitter is all about setting up a routine.  You’ve set up your application properly and your RSS feeds are feeding, now you have to schedule time each day in order to catch up on all of this data. Some folks might argue that “Twitter is too organic, man…you have to let it wash over you like a moonlight swim”, I’m not exactly sure who those people are, but trust me they are all over the web, avoid. But you need to set up a routine for yourself that will allow you to keep up with the often insurmountable amount of data that will be coming your way. I’ve found that my best listening is done in the morning, so I make sure to review all my RSS feeds during the first hour in the office. Then I use my Twitter application about once an hour for five minutes to review the conversations. All in all it helps me find the right conversations and listen to what folks are saying.

Each morning and throughout the day you are going to find people that are important to your business in some way or another, now it is up to you to engage. And that of course will be in my second column!

10 comments

Social Media Measurement: Yes, ROI Matters

Jason Falls blog, Social Media Explorer, is right near the top of the list of my favorite social media blogs.  Jason had a post last week about social media measurement that led to a pretty lively discussion in the comments, on twitter, and on a number of blog posts that linked to the original post.  For some reason, I can’t seem to get this one out of my head…there was a lot I agree with in the discussion, but also a number of things that just don’t ring true to me.  In no particular order, here are some of my thoughts:

Like it or not, ROI matters

Based on what I saw in the conversation that followed Jason’s post, people’s views about ROI measurement seem to fall along a continuum.  On one end is the group that argues that measuring ROI might be hard, but it’s not impossible, and, given that the end goal of social media participation is to grow the business, social media marketers are either going to figure it out or they’re going to get screwed.  Dan Thornton makes the argument pretty effectively in his comment when he says that engagement metrics are important, “but you still need to figure out where engagement sits for the rest of the business, and how it’s integrated into other areas. If it’s contributing to natural search results, for example, then without any measurement of other outcomes, the results are all attributed to SEO work, and engagement is disregarded.”

At the other end of the spectrum is a group that, at best, is ambivalent about the idea of trying to measure social media ROI in terms of financial metrics.  Shannon Paul’s comment is indicative of this:

“I understand that businesses make decisions based on the bottom line, but isn’t social media engagement all about humanizing organizations? Ultimately, businesses are made of human beings and most human beings I know are motivated by a number of things in different measure — profit is only one such motivator.”

Shannon is another one who’s writing some really good stuff on her blog, but I’m with Dan on this one (just in case the title of the post didn’t tip you off).  Peter Kim summed up my feelings about this best when he said “I have and will always believe that the purpose of marketing is to sell stuff, whether direct response or 30-year sales cycle.  Marketers who don’t believe that their job is to ultimately sell something should become receptionists instead, if all you want to do is talk.”

Yes, metrics that indicate the quality of conversations are important and, yes, people should get more out social media participation than financial gain.  Frankly, I don’t think you can be successful without these things.  But at the end of the day, if participation isn’t going to result in revenue for the business, the initiatives aren’t going to get funded and it’s all for naught.  Marketers can get away with this now because we’re still deep in the early adopter phase, but this won’t last long.  Particularly in this economic environment, companies are going to move quickly from exclusively measuring things that indicate level of participation to measurements that tie to revenue.

You can’t determine the right metric without first identifying the goals

Katie Paine talked about letting your objectives drive your choice of metrics in the video interview that accompanied Jason’s post (watch this video…the ROI on the 11 minutes you’ll invest to watch it is very high :-) ).  Paraphrasing her comment, “in order to determine ROI, you need to know what the R is.”  In other words, you need to decide what you’re trying to achieve.  I think this is exactly right and it a point that gets missed often.  The metrics for measuring word-of-mouth effectiveness, for example, are going to be very different than the metrics for brand loyalty.

Incidentally, as part of this discussion, I’ve seen a number of tweets/comments saying that social media isn’t for attracting new customers, it’s for building relationships with existing customers.  Maybe I’m just misunderstanding what people are saying because, at face value, this doesn’t make sense to me and there are plenty of word-of-mouth case studies that refute it.  Some examples: 1) NetQoS’ viral video campaign – two of the primary goals were to increase traffic and drive leads.  The net result of their campaign was that it added $500,000 into the pipeline, 2)  Caminito Steakhouse, where they’ve seen a 30% increase in sales concurrent with a significant improvement in search engine rankings on key terms…they haven’t drawn a clear line that shows the link between participation, improved PageRank and increased revenue, but I guarantee you that it wouldn’t be hard to build a model that shows clear correlation, and 3) Martell Home Builders – take a look at the comment from Pierre Martell (the owner of the business).  Lead gen is a key part of their strategy and according to Pierre, “from an ROI point of view, because of the real estate fees were saving, it didn’t take many sales to justify this approach from a pure dollars and cents point of view.”

Traffic still matters

Katie argues that traffic doesn’t matter.  I disagree.  By itself it doesn’t, but in conjunction with other metrics, I think it’s still valuable.  Give me two blogs that are equally relevant to my customer, have the same average number of comments, have the same PageRank, etc.  Are you telling me that, even if one of these blogs has twice the traffic as the other, it’s no more valuable for word-of-mouth than the other?

Small and mid-size businesses have different measurement capabilities and needs than big businesses

Note the mention of ROI in the NetQoS, Martell Homes and Caminito Steakhouse word-of-mouth case studies.  For all three of these SMBs it just isn’t that difficult to measure ROI because the marketing mix isn’t that complex and the customer touchpoints are easier to track.  Very different than a big company, where measuring ROI requires fairly complex modeling since there are so many more possible drivers of revenue.  Do the metrics that the small business uses encapsulate all of the benefit provided by social media participation?  Definitely not, but it doesn’t matter.  Despite the fact that some of the value generated doesn’t get captured by the metrics (e.g., for NetQoS, prospects that become aware of the company as a result of the video campaign, but visit the site through organic search), there’s still enough measurable value to clearly justify the investment.

Measurement on the front-end is very different for the small business as well.  Big companies might think it’s important to conduct detailed analysis to determine influence, but small companies have neither the time or money for this.  While traditional metrics have problems, they’re simple and, when combined with engagement metrics, they’re good enough for small businesses.

So what does your social media dashboard look like?  What are your social media goals and what are the metrics that you track most closely to determine your success?

18 comments

Why word-of-Mouth lets you run circles around bigger competitors

I posted this last week, but an IE bug was causing problems with it.   Turns out the original image was causing the problem (a photo of Gary V…who knew he’d take our blog down ;-).  here’s the repost.

I just finished watching Gary Vaynerchuk’s video explaining how word-of-mouth marketing is changing and what this means for brands today.  Great stuff…totally entertaining and Gary does a great job of explaining word-of-mouth in a simple, powerful way.  He describes the change like this:

Word-of-mouth has always been the most powerful (form of marketing)….But here’s where it gets (even more) powerful.  Word-of-mouth has fundamentally changed in the last three years, because of social media.  Twitter and facebook and other products like that have allowed your voice to go extremely viral.  So let’s just say Chris Mott over here was the biggest socialite in New York City and he just went to every event every night.  He was the biggest yenta in town.  How many possible people could he tell about your service?  Five hundred?  A thousand, if that’s all he did for a month?  Well now, one press of the button on twitter and tens of thousands of people are going to know.

Gary goes on to say:

Plus, understand word-of-mouth.  So now you tweet something else.  Well then somebody blog posts about it.  Somebody StumbleUpon’s that.  Somebody digg’s that.  The tail of word-of-mouth is the power of what the Internet has created.  As soon as you understand that, the sooner you’ll be able to build brands on the Internet.

Exactly right…and the beautiful thing for small and mid-size businesses is that big companies still aren’t participating to any great degree, which gives you a great opportunity to establish yourself in the marketplace.  According to research conducted by Ross Mayfield and Chris Anderson, only 12% of the Fortune 500 are blogging, which is WAY below the average for private companies.  Given the low level of participation on blogs, you can only imagine what the numbers must look like for social services like Twitter, facebook, digg, etc.

Why aren’t big companies focused on social media marketing and word-of-mouth?  Simple…they don’t feel the impact of not participating, so they don’t think they have to be.  They can skate leveraging traditional channels and relying on the brand equity they’ve built up over years.  We’re in the midst of the single biggest change to marketing since the advent of television, and as a small business it’s almost impossible not to feel the impact of this.  Big businesses won’t feel it for years though, so inertia keeps them from acting…momentum keeps a supertanker moving forward for a long time, even after the engines have been turned off.

At this very moment, someone in a Fortune 500 company is in a windowless conference room walking his boss and peers through a 42 slide PowerPoint about how social media marketing is “for real.”  When he finishes, everyone will congratulate him on the great work and they’ll all agree that “this is something we really need to keep our eyes on.”   As anyone who has worked in a big business knows, this is code for “I’m not doing s**t until someone tells me I have to or until it shows up in my bonus plan.”  For small and mid-size businesses, this provides a great opportunity to use twitter, your blog, comments and all sorts of other social tools to build the brand, pick off customers with long-tail searches, engage with the new influencers in your market, etc.  By the time the big business finally realizes that it needs to get off the dime, you’ve already established yourself…and the competitive advantage is sustainable because as easy as it is for the supertanker to rely on momentum to coast, it’s equally as hard to get it moving again once it stops.

Update: Jason Falls has a great case study up that demonstrates how one small business is incorporating social media into their business.  My primary focus in this post is on lead generation whereas Jason’s case study focuses more on the value that this business is getting in the middle part of the sales funnel (brand preference and consideration).  Definitely a worthwhile read.

7 comments

Rethinking the DEMO, TechCrunch 50 Megalaunch

Wow.  The blogosphere has erupted into a near riot after Robert Scoble’s “companies launching at DEMO suck” series of blog posts.  The discussion has understandably been emotion-filled, but other than some really good link-bait, I’m not sure much value is coming out of it.

What I’ve been thinking about a lot though is how the “big conference launch” fits into our plans here at BuzzStream.  We’re a micro-financed business, so we look long and hard before undertaking a big expense like a conference launch.  I think the beat down that some of the DEMO companies took occurred because their approach to launch marketing doesn’t match the economics of their business.  There’s been a lot of talk about how the economics of building a product have changed.  The economics have never been better for starting a business and the way that companies get funded and products get built has fundamentally changed.  The problem is that, while a lot of companies have bought into the “micro” strategy for developing a product (small team, low financial commitment, etc.), they’re holding on to the traditional, big bang approach to getting the word out.  There’s nothing wrong with this approach for the traditional VC-funded company, but I’m not sure it makes sense for businesses like ours.

FACT: There’s too much that has to be done for these conferences in so little time, so something is almost guaranteed to suffer. For many of the DEMO companies, their marketing efforts appear to have taken the hit.

The cost and time required for the traditional, big-bang, big conference launch adds up quickly…and yeah, I know, TechCrunch 50 is free, but the entry fee is just where your costs begin.  Let’s look at an example.  My co-founder, Jeremy Bencken, was invited to present at DEMO to launch Tenant Market a couple of years ago.  In addition to the entry fee, he calculated the following costs for even a bare-bones approach:

  1. devote 80 hours to prep time.  At $100 an hour, that’s $8K.
  2. Speaking coach – $5K
  3. Travel – three nights for three people – $6K
  4. PR rep – $10k to $20K (lots of variation depending on the quality of the PR professional and the required retainer)
  5. Booth, collateral, SWAG, etc. – $3K to $5K

So you’re looking at around $40K in addition to the entry fee.  On top of this, doing a big launch is similar to moving into a bigger house and suddenly realizing you need new furniture, art, etc.  If you look at what Scoble is keying off of, it’s the website of the DEMO companies….another big cost, and one you wouldn’t associate at first with the cost of a big conference launch.  When you go with the big launch though, you’re now expected to have the perfectly designed marketing website with the perfectly crafted message leading to the app that scales to an unlimited number of users.  LOTS more time and money for that.  For us, it just doesn’t make financial sense.  And we don’t view it as necessary either because we don’t think it’s aligned with how most micro-financed businesses typically grow.

Again, I’m not suggesting that shows like DEMO and TechCrunch 50 aren’t valuable.  For the right company, there are few marketing vehicles that can have as big of an impact.  A good showing can single-handedly change the trajectory of a company and put it on the map.  But we just don’t think that the big bang launch is aligned with the economics for a micro-financed business…and we look at going down that route as more than just a marketing decision.  It’s a decision that impacts the company’s core strategy.

For us, it just feels more comfortable to go with a more measured, “slow burn” approach to our launch.  We look at the initial launch as just a step in the process….and hopefully along the way our product will grow, our message will get better, we’ll continue to build relationships and our skills at link building, blogger relations and social media marketing will continue to improve.

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Entrepreneur Self Test: Do I Need a PR Agency?

If you’ve been following my PR4Priates blog for any amount of time, you know I write all about the nitty gritty of helping entrepreneurs do their own PR, so hopefully my answer is obvious– not necessarily.  But take the test to find out.

ReadWriteWeb posed a different question today: Does Good Tech Need PR at all? Yes, you absolutely need some level of PR.  What RWW suggests is that there’s an inverse relationship between how compelling your idea/technology is and how much PR you’re going to have to do.

The fantasy world scenario is that you release your product on Monday, get some initial coverage on a few blogs, more bloggers find it, you hit Techmeme by the weekend, and then before you know it Walt Mossberg (WSL) and David Pogue (NYT) are calling begging for exclusive interviews.  Then the press is calling non-stop.  Before you know it, you’re joking around with Leno in the Green Room.

Ahem, the more likely scenario is that your technology is great but needs some explanation.  Nobody is begging for an exclusive and getting coverage requires actual sustained effort.  So then the question turns to whether you can sustain the effort yourself, or whether you need an agency.

Here’s a quick self test of whether you should consider getting a PR agency:

  1. Can your technology/solution be understood in a 3 second sound bite?
  2. Do you know who should be covering your story, like which specific blogs and reporters?
  3. Does your story lend itself to being told?  Does it have a “hook” such as controversy, a great solution to well understood widely felt pain, or famous founders?
  4. Does one of your founders communicate well?  Do you have someone who can communicate with the press, comment on blogs, and whose email messages don’t consistently elicit cringing?  And does this founder have time to handle communicating?
  5. You don’t have ready access to a cheap, skilled PR agent with many contacts in your industry?
  6. Is your company’s current bank balance below $1M?

If you answer “no” to more than two of these questions, you may want to consider using a well-connected, hopefully reasonably-priced, PR agent in your industry.  Obviously for bootstrappers this may still be a non-starter, so the job (like taking out the trash and watering the plants) falls to one of the founders.  But this little test gives you an idea about whether doing your own PR presents so many obstacles that your time would be better invested in other things.

For tech-related founders, beware of your natural instinct to over-invest your time in your product and technology.  Getting the word out about your company is one of your most important jobs, so don’t neglect it regardless of whether an agency is the right path.

Lastly, Scoble argues that you shouldn’t do any outbound PR at all– you should build something so awesome that your beta testers become your evangelists and are inspired to contact their trusted press contacts on your behalf.  Steve Rubel agrees. I’m not wild about this kind of hit-or-miss approach.  Most Type-A entrepreneurs won’t be either.

What are you supposed to do when your beta is almost over and you have no coverage?  Invest more in the product?  Pray? No, it’s time to take matters into your own hands.  Fire up the outbound engine… post to your blog, Twitter, comment on relevant blogs (without plugging or pushing your company), and, ahem, send friendly, relevant email to bloggers and reporters who should be writing about you because you’ve been following them AND built some kind of relationship over time.  Techcrunch also has some great suggestions about how this actually works.  It can even be fun!  I don’t mind trying the Scoble-Rubel build-pray-discover strategy, but it might not work for you, and you can’t just sit there doing nothing or build your product forever.

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Hi, We're BuzzStream

We’re a startup Internet company based in Austin, Texas.  While we are not talking about our business much yet (except to say it’s really cool and if you work in the area of Internet Marketing, you’re going to LOVE it), here’s a quick rundown on our founders.

  • Paul May, CEO – Paul was employee #1 at Support.com (SPRT) and has held senior roles in several Austin area startups, most recently at Alterpoint.
  • Jeremy Bencken, Chairman – Jeremy co-founded ApartmentRatings.com and TenantMarket.com which were acquired by Internet Brands (INET).
  • Randy Hammelman, CTO – Randy founded Conducive Consulting, a custom software development services business which has served a number of Austin companies.

We’re also excited to have great people advising us, including Pam O’Neal, VP of Marketing at BreakingPoint Systems, and Jack Long, founder of Chairman of PeopleAdmin and Master Teacher with the Acton MBA program.

While our product is still baking, we’re going to be blogging about issues relating to Internet Marketing, with a special emphasis on Blogger Relations, SEO, and PR.

1 comment

Anatomy of an A-List Blog Mention

Friend and fellow entrepreneur, Aruni Gunasegaram, got a sweet PR mention this Memorial Day weekend on Fred Wilson’s blog.  Fred’s blog, A VC, has probably 10k daily readers and PageRank of 6.

If you’re an entrepreneur, you should take note because what Aruni did cost her $0 got her some incredibly valuable PR visibility and link juice.  Here’s how she did it:

First, she got the idea to partner with eMailOurMilitary, to offer active service military deployed overseas free use of her product, Baby Insights.  Baby Insights is a service that allows new mothers to track virtually ever detail of a newborn’s life– eating, sleeping, pooping– all on a PDA.  Cool idea and giving it away is a great way to honor our military because the difficulty of being separated from a new baby obviously greatly compounds the sacrifice of service.

Next, she wrote up a press release, posted it on PRWeb, then posted on her blog about it.  Then she announced it on Twitter with a link to her blog post. 

Finally, she sent Fred Wilson a direct message via Twitter saying (paraphrased) “Hey, if you’re going to post on Memorial Day please consider mentioning this partnership,” with a link to her blog post. 

Indeed, Fred wrote a great Memorial Day tribute to the Armed Forces and included a mention at the end of the post, saying “And speaking of military life, here’s a neat example of two women who met on twitter who have teamed up to deliver a service to families separated by military service,” with a link to Aruni’s blog.

Here are a few reasons I think this was a great example of effective DIY PR:

  • Aruni was active on Fred’s blog as a commenter prior to pitching him, so he recognized her, if not had the beginnings of a relationship by that point (this is a perfect example of the conversational PR model Brian Solis wrote about this weekend).
  • Fred has written a lot about Twitter and Aruni’s post mentions that she met the other founder on Twitter, which Fred no doubt liked (and mentions in his post)
  • Timing – her news was timely– she announced a partnership right before Memorial Day, and it dovetailed perfectly with the idea of honoring the military
  • Soft target – it was a slow news day – it was a bit of a gamble that Fred would be posting on Monday, but it paid off because he was likely receiving very few other timely and relevant pitches.

Fred is definitely an A-List blogger, and even if getting coverage on his blog doesn’t necessarily bring lots of Aruni’s target customers to her site, she benefits in several ways:

#1 Her company earns recognition and validation from a respected influencer, #2 her blog gains the all-important link juice, which she can then redirect toward her product pages, and #3 she becomes top of mind in the online baby space for other potential partners.  I know Aruni has been doing a lot of work to raise her site’s visibility, so big congrats!

3 comments

Takeaways from Austin Web CEOs Best Practices Meeting

Photo by Flickr user Texas to MexicoI’m posting a few takeaways today from Friday’s CEOs Best Practices Meeting.  David Altounian from iTaggit organized and hosted 12 companies at River Place Country Club with the goal of sharing “what’s working” and “what’s not” in B2C web companies.  The scene was a mix of pre-fundraising, bootstrapped, angel-backed, vc-backed, pre-revenue, and profitable companies.  Companies included ApartmentRatings.com, Babblesoft, Edioma, iTaggit, KeyIngredient, Mindbites, Moximity, MusicGorilla, NaturallyCurly, OtherInbox, VolunteerSpot, and Wowio.  Here are my takeaways in no particular order:

  • Interesting business models are emerging in mobile apps, but app integration is a costly problem for startups ($60k per platform port).
  • Selling display advertising to CPG advertisers requires going direct to the brand, skipping the agency.
  • Link exchanges aren’t working but “strategic partnerships” are — you need a highly relationship-based approach for this path.
  • Several companies have tried multiple PR firms without success – The pirate perspective: start building your media list early, do you own PR in-house, and hire a firm once you’re comfortable with it having 50/50 (and maybe a little less) odds of success.
  • Videos posted on YouTube are driving traffic – there’s a new trend in people turning to YouTube searches first for information on how to do things; these don’t have to be so-called “viral video” a simple ‘How To’ instruction video will suffice.
  • Recruiting – Finding Ruby and Java developers in Austin is a serious problem.
  • The fundraising environment is very difficult – some attribute it to a disconnect between consumers and investors.

 

The last point is one that’s probably most debated.  Here’s my perspective over the last year of attending CTAN screenings and presentations: people like to invest in what they know and/or enjoy.  The number of folks in Austin who have earned their money from consumer web offerings AND who are active angels is quite small compared to angels who came from service businesses, enterprise software, systems management software, semiconductors, and Dell. 

That said, I’ve seen a number of non-B2C angels step up to consumer startups.  But when they do, they tend to be fairly cautious.  For early-stage (seed and/or Series A) Austin consumer web companies, here’s my take on the profile of successful angel raises:

Angels: A working product, a scalable model, revenue, and a willingness to exit.  It also really helps to have a serial entrepreneur as a founder.  Your raise should be between $250k and $1M.

Some smaller funds like G51 have been active B2C funders, as have a few out-of-town VC’s like True Ventures, Benchmark Capital, and DAG Ventures.  Here’s my take on the profile of successful VC raises:

VC’s: A working product, a scalable model, a compelling, innovative, and defensible take on an emerging market, and the potential for a billion dollar exit in 5-7 years.  Your raise should be $1M or more, although there was some talk that $1-$3M is no man’s land right now.  If the founders are first time entrepreneurs, it also doesn’t hurt to have some ivy on their resumes.

Agree or disagree, feel free to comment.

3 comments

Flacks = Quacks? Avoiding PR Malpractice

Photo by Joyrex at Flickr

So you’re an entrepreneur reading the latest “pr sucks” meme to hit the Internets and thinking, “shit, we were counting on PR to drive 1,000 beta sign-ups in the first 6 months… now what?”  Or you heard that your agency is listed on the ignominious prspammer blacklist.  It’s not good, Jim, not good at all.  To recap: Gina Tripani at Lifehacker created a blacklist of agencies who spam her personal email address; Todd Defren apologized; then the conversation got ugly with PR’s on one side saying, “hey, there’s bacon and tofo besides spam,” or “blacklists = bigotry against PR’s,” and “oh, by the way, quit crying, PR spam is an occupational hazard,” and bloggers saying, “wtf… why can’t you read my ‘How to Pitch Me’ instructions?” Or worse, “It’s ALL spam.” 

So what’s actionable for the entrepreneur?

If you have an agency on the blacklist, I wouldn’t worry about it.  No serious blogger is going to use the list.  For starters, if people like Brian Solis are banned, there’s a problem with the list.  Second, if anyone can add to the list, good firms will be blacklisted for pretty weak reasons.  For a serious tech blogger, the risk of missing quality tips is too high.  Indeed, Gina isn’t proposing to apply the blacklist to tips @ lifehacker, just her personal email.  But there’s a more insidious risk: you or your PR people may already be blacklisted by bloggers and not even know it.  Gmail, Hotmail, Outlook all have easy “spam” flagging, which bloggers are undoubtedly using.

As Warren Buffet says in his ads for  Borsheim’s, “If you don’t know diamonds, know your jeweler.”  The same applies here… really know who is contacting the media on your behalf.  Find out if they’re using backchannels like Twitter, AIM, and Facebook messaging to contact the press.  Find out which feeds they’re subscribed to (and do these correspond to the top blogs in your industry?).  Are they giving bloggers an OPML file?  If they give you a wild look and a bs line like, “oh, we’re exploring and adopting new technologies all the time,” that’s a very bad sign.  It roughly translates to, “No, we are too busy spamming the crap out of the media to have actually started using any of  this new stuff.”  One more thing you should ask: do they generate media lists from Vocus or Cision and/or send bulk pitches from within there? If so, be worried.  If so, it indicates they are doing extraordinarily little research on the reporters they’re reaching out to, not personalizing their outreach, and basically spraying and praying your pitch to journalists.  There’s a very good chance they’re already ending up in the spam folder.

If you’re doing the outreach yourself or have a freelancer, internal marketing manager, or Evangelist assigned to the job, here are a few thoughts:

  1. It’s about following directions.  People not reading Gina’s site and abiding by this following statement, “Please, no press releases or Lifehacker story pitches to my personal email address,” is what set off the blacklist.  So you need to get of our your feed reader occasionally and look for the “How to Pitch Me” page on the blogger’s site.  If they don’t have one, my first email would not be a pitch but rather, “I wanted to send you some PR news, is this the right way to contact you?”
  2. It’s about targeting.  The prspammer wiki describes the companies listed on it as having sent, “unsolicited (and almost always irrelevant) product pitches…” As an entrepreneur, if I had significant news (funding, product announcement, private beta invites, etc.), I’d want my team spreading it as wide as reasonably possible.  If a reporter wrote about a competitor, they’re relevant to me.  If they cover my industry, they’re relevant.  If they wrote about a topic that’s relevant to my customers or end-users, they’re relevant.
  3. It’s about personalization AND context.  Now, even if you’ve built a carefully targeted and relevant list, the journalists you want to pitch may not see the connection between their beat and your news, so it’s your job to provide the context (“You may recall you wrote that story about our competitor, XYZ.  I wanted to tell you about our news…”).  Maybe using Word Mail Merge to personalize greetings (e.g. “Hi Mitch…”), is your idea of a personal email.  You need to take it a step further.  I think it’s fine to send the same basic press release (and consider sending a social media release if you do), but you need that precious little personalized blurb at the top that says, “Hi Gina, I commented on your post about X, and I wanted to tell you about Y news that relates.  I know you said Z in your post, but we’d love to get your take on our product because we think it does a better job addressing A, B, C issues that you discussed.”

 

So you’re probably thinking, “How do we build a broad yet targeted media list?  How we ensure that we aren’t  contacting a blogger the wrong way?  How do we personally convey why we’ve targeted a particular journalist?”  There’s the rub.

Well, Rome wasn’t built in a day.  Even if you hire an agency, you can’t expect them to instantly have a list of perfectly targeted media.  So if you’re doing it yourself, the first step is to setup a bunch of Google Alerts for your keywords, subscribe to (and read) relevant blogs, and build your media list slowly over time based on the coverage you discover.  Use delicious or Diigo to bookmark the most relevant stories.  Then when you’re ready to send some news, you or your agency has a realistic starting point for doing it in a targeted, personalized, contextual way.

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Big List of Austin Consumer Web Startups

Lately I’ve had some conversations with folks about Austin’s, shall we say “weak environment” for consumer web startups.  I actually think Austin is doing OK… (maybe not as well as Silicon Valley and Seattle, but not too bad all things considered).  I like to think I’m up-to-date on what’s going on in Austin, but lately it seems like I’m discovering more and more Austin consumer web companies. So I’m creating a big list to keep track of them all. Email me if you know about more and I’ll add them to the list. Also, check out AustinStartup.com.

ApartmentHomeLiving.com
ApartmentRatings.com
Babblesoft
Bazaarvoice
BedandBreakfast.com
Bones in Motion
Creditcards.com
Dwellgo.com
eSessions.net
Expertvillage.com
Giganews
Golfsmith
Homeaway.com
Indeed.com
Itaggit.com
Mindbites
Minggl
Naturallycurly.com
Otherinbox.com
Peoplepad
Pickaprof.com
Pluck
QikCom
Qipit
QuickGifts.com
RottenNeighbor.com
Shangby
Slacker
UCareer.net
Uship.com

The next High Tech Happy Hour is Thursday 4/17 at Hi-Lo at 6th & Lavaca.

UPDATE: New listings

7 Billion People
DadLabs
Dream Jobs
Edioma.com
KeyIngredient.com
POPHoundz.com
RateGenius
Snap Pages
Texas Hunt & Fish
VolunteerSpot.com
Voyant
WeAreTeachers
WiredReach
Wowio.com

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