number of digital leaders who lamented the experience of working with tech
start-ups. I want to start by saying that these critics are not people who
don’t appreciate innovation – to the person, they love it – but at the same
time they find it difficult or off-putting to deal with the companies that are
driving the change in the industry.
our experience with the media companies we deal with on a more regular basis,
service from tech firms generally doesn’t stack up. Our core complaint is that
the tech company is there when an IO needs to be processed, but impossible to
reach when you want to talk about business issues or address issues in a
program that is running.
sales people tend to be thinner on the ground for tech firms than media
companies, that doesn’t excuse bad service. The ironic thing is that while
media companies are desperate to hear more about business issues – to be
treated as partners – tech companies tend not to be. Not always, but
why aren’t tech firms as responsive? First, I think we need to recognize that
the tech world values TECH, not service. VCs are primarily concerned with the
quality of the tech team, thinking that for the right product other disciplines
can be backfilled in. Not an excuse, but a fact just the same.
most consumer facing tech solutions were devised to meet consumer needs, not
advertiser needs. We all know that most media-rooted properties – magazines for
instance – exist because advertisers want access to an audience AND consumers
want information. So media companies tend to be more flexible about providing
more and more intrusive ways to reach out to readers. Contrast that with a service
like Twitter. I will wager that virtually no attention was paid to advertiser
needs when that product was first conceived. The result is a service that is
highly appealing for consumers but harder for brands to get their heads around.
media company models and service structures were conceived in an era of
information scarcity – where producing, say, the best shelter magazine meant
consumers got exponentially more “with you” than “without you.” Scarcity meant
more revenue, and that they could afford to pay for more service providers. By
contrast, au courant tech companies are developed in an era of consumer control
– where that shelter content competes with thousands or tens of thousands of other
“fish in the sea,” and the vast majority of those “fish” offer up their content
for free. It is only natural, then, that those companies place more emphasis on
ensuring that they deliver what consumers want rather than what advertisers
great service for advertisers tends to focus on qualitative factors, custom
offerings, and high touch experiences. Those are not the core strengths of tech
companies. I think of it like this. That tech CEO is trying to change the
world, not change the way I feel about anti-perspirant stains on fabric. Not an
excuse for bad service, but something to consider as we ponder what we can
realistically expect to get from them in terms of service.
they really haven’t had to care about us until recently. Put yourself in their
shoes for a sec. If your sole source of revenue is a VC, and the VC vales tech
leadership over everything else, what incentive would you have to build out a
partner services org? But as those VCs shift to wanting tech companies to start
generating revenue more quickly, the companies themselves need to find ways of
satisfying the very people that make that possible. In addition to their
a market driven economy, money talks, and if a tech company wants $500K of your
budget, you have the right to expect them to treat you right, answer your calls
and messages, listen to your needs and go back and see if they can address
them. If they don’t do those things, they shouldn’t get your money.
is no excuse for bad service. But it might be useful to give a well meaning
team the benefit of the doubt if they really are in the process of changing the
world. In many cases, these teams are filled with people who must make up their
service strategies as they go along, and it is possible that you could forge a
great relationship with a great company in the process of helping them better
marketers absolutely have the right to expect service to improve over time. In
my view, dealing with a few growing pains along the way is acceptable if the
tech company really is transformational in nature. But persistent crappy
service isn’t acceptable. And even the largest transformational tech companies
need to remember that just as consumers have thousands of choices online, so
too do marketers.
Thanks to ad:tech for publishing this first.
We live in an era where newspapers continue to fall in circ and close. We sorely need a new media model that can fill the void in local and regional news coverage. While on some level we all have access to more news than ever through the Internet, there really isn’t a proven model yet that can perform the vital public service that local media once provided.
There are certainly some being tested. AOL’s Patch, for example, provides local news via a special page each for hundreds of communities – each with a local editor in place in the community it serves.
Another model I’d like to tell you about is that of New West, a start-up based in Missoula, Montana which has just received its second round from Flywheel Ventures of New Mexico. New West was formed to serve the local and regional needs of the Rockies by combining professional journalists, bloggers, photographers, and community members in a digital offering that serves local news and information needs as well as those of the region at large.
It couldn’t come at a more opportune time. Lots of small local papers in the Rockies have gone under – and with them the important community information and advocacy that newspapers have traditionally provided to the communities they serve.
The editorial remit of New West is to analyze the top news in a six-state region with a focus on stories that affect the region as a whole, and deliver these in a manner that shows a unique regional perspective. Soon, the publication will debut six state-specific pages to cover the issues unique to each of those areas. Finally, the publication is working in partnership with FWIX to deliver localized news feeds for a reader’s location.
Sharing content across media outlets is of course nothing new to the newspaper business. AP and UPI were built on this very concept, and continue to provide an important set of news and information for offline and online media alike.
But New West is vertically integrated, based upon the compelling idea that there are news and issues unique to the Rockies that are best covered by people who are part of the region. Essentially, that there are a Rocky Mountain outlook and lifestyle that are unique, and fundamentally underserved by the national and international news syndicators. That there are critical regional issues of great importance to residents. Issues like:
• Regional politics
• Tourism and the “snow industry”
The Rockies are fascinating socioeconomically, and certainly the realities of daily life are rather different from those I experience in urban Oakland. By celebrating and working to protect that daily life, New West hopes to drive greater cohesion in a ruthlessly independent population.
In addition, New West seeks to help advertisers reach and connect with the demographically comfortable, culturally aware, and fundamentally active readership. Further, the audience stats for the site are rather impressive:
• 84% College grad
• 93% vote in local and national elections
• 20% CEO/President/Chair/Owner
• 31% Manager/Director/Supervisor
Stats better than many of the “go-tos” we traditionally choose when we want to reach an elite audience. Indeed, you would probably be shocked at the number of VC leaders that call Montana their second home.
In addition to IAB standards, the site offers interstitials, rich media experiences, sponsored content, and deep brand integrations.
One of the things that is clear based upon their editorial mix is that Westerners are anxious to be a part of this new company and model. The number of authors who post to the site, the number of business leaders who contribute, and the number and depth of community participation in the content are remarkable.
In addition to the website, the company has wisely chosen to develop multiple revenue models, including an events business and a web development shop that helps supplement revenue and incomes as the publication continues its growth trajectory.
The site itself has received a great number of industry accolades, including this from the New York Times.
By just about every measure New West, the online magazine, is a success: It features great writing and reporting, presented via a smart blend of magazine and bloglike articles covering the Rocky Mountain states. Traffic is growing. Critics are raving.
I like their pluck, and their commitment to doing well by doing good – helping community members and advertisers capitalize on the unique attributes of Rocky Mountain life.
Cheers? Jeers? Tweet ‘em to @CatalystaJim.
We’re now well into 2011 and it’s starting to look and smell a little bit like 2000. Once again we have M&A activity, consolidations and IPO’s taking place on a weekly basis that generate mass coverage. The news is out there, led by the Huffington Post being acquired by AOL, and followed closely by news of Linkedin and Pandora filing for IPO’s. Meanwhile we see angels and VC’s once again throwing money at companies with a vengeance not seen since… well… mid-to-late 2000! But does this wave of hype and excitement signal an impending collapse based on overvaluation, like we saw in the dot com bubble?
For what it’s worth, I don’t think so. Back then the hype was just hype, and the over-inflation was based on prospective value in the marketplace rather than real revenues. These days the growth and investments are based on real revenue, though some may argue the value of some of these companies are slightly exaggerated, but that means the floor is more stable than it was in 2000. These companies are generating real revenue, they are growing, and the investors and speculators are betting their futures on real companies rather than vaporware.
Companies like LinkedIn and Pandora offer real value to consumers. These companies generate real money and going public makes sense because they’ve paid their dues and they can continue to grow. The speculation on their respective futures may drive a minor bubble at some point, but the fact is if there were another “margin call”, the value of these businesses would only go down so far, they wouldn’t drop to zero. They could decrease to the point where their actual revenues reside, but that’s far better than most companies in 2000 and 2001. You can certainly question their multiples for valuation, but you can’t question that there is value in and of itself.
The investment dollars that are going into these businesses to create value are also better placed than they were in 2000. Leading up to the last dot-com bubble there was a period of irrational expenditure, and that’s not the case this time around. We’re coming off the worst recession in a very long time, and there are still signs of instability in the economy. Housing is still down, and unemployment is still higher than we would like. There’s still conservative optimism. There’s minimal inflation of value because most other markets are artificially being held down right now. If anything, the tech sector may actually begin to lead the growth of the economy and create more value as a halo effect for the US. These companies are creating jobs, and that’s what we need to see more of right now, in order to sustain continued economic growth.
On the flip side, the entrepreneurs these days are scrappier than they were in 2000, and I’ll go out on a limb and say they’re even smarter. I can’t foresee any more examples like what happened with Boo.com, when they spent $188 million in 6 months. The people behind the money are more cautious and more watchful, and if anything they are more conservative than anyone was back then.
No – I don’t see another bubble, per se, but that doesn’t mean we can’t still be cautious. If you’re looking for money in this environment, be sure to do your homework. If you’re investing in this environment, be sure to do your homework. If you cover the companies on either side of this relationship, be sure to do your homework. If we can maintain a base of rationale thinking we could see some very interesting, and very valuable, growth over the next few years and that growth could lead the rest of the country into a new age of digital and/or industrial renaissance. Enjoy the ride everyone!!
What’s happened to the VC’s?
I recently read a report that broke down the trends in venture capital investments from 2010 and there were definitely some interesting nuggets, but the fact that has me most intrigued is venture capitalists appear to be laying off early stage investments and focusing their efforts on later stage companies, leaving the early stage and seed investments to the ever expanding world of the Angels and Super Angels.
This is a trend that’s readily apparent in the valley as well as on the east coast. I personally think the whole trend dates back to the now infamous “R.I.P: Good Times.” presentation that was distributed by Sequoia Capital a little over two years ago. In that presentation Sequoia advised its companies to make cuts and hold onto money because the recession was going to be a long and arduous ride and additional investment was going to be hard to come by. That presentation went viral and it signaled a change in the mindset of most VC’s and definitely their portfolio companies, whereby everyone basically decided to batten down the hatches and ride out the storm.
Of course that presentation didn’t stop new companies from forming, but these new companies are scrappier than they were three or four years ago and the entrepreneurs behind them are scrappier too! They’re very interested in getting profitable quickly and with as little fundraising as possible! That trend is one I whole heartedly support, because it means businesses are being evaluated more cohesively and business owners are being more intelligent and more thorough when they launch, rather than raising millions and spending like drunken sailors.
This new mindset of the entrepreneurs is a breath of fresh air, but the VC’s never seemed to recover from that presentation. I know a number of great businesses that have folded up over the last two years simply because they couldn’t raise the seed money that they used to get from the VC’s. The VC’s appear gun-shy now and although a nice bump in funding was seen during the last two months of the year, I’m certain the rest of the year saw the majority of early stage funding from angels rather than VC’s. The angels are now the go-to-group for early stage, and the VC’s are networking with those same angels to provide Series A or B investments to those that “graduate to the big time”, so to speak.
The angels are now taking over this aspect of the business, and I can’t decide if that’s a good thing or not. The angels are dominated by a number of very wealthy individuals and a strong number of angel groups. The rest of the angels are entrepreneurial minds with some discretionary savings and a taste for the start-up world. The angels are typically what we call “smart money”, meaning people with connections and contacts that can benefit a specific company. These are people with a passion for the business and they tend to get very involved in their investments to make sure they get a positive return. These start-ups are scrappy, but the angels are scrappy too! What I find interesting is that when scrappy entrepreneurs and scrappy investors get together, good things can happen and these companies could take off, fast becoming profitable on their own, possibly not needing the VC’s in the long run.
The long term consequences of the shift in the VC world could mean that there will be fewer companies for the VC’s to invest in later because these companies simply may not need them! Additionally, the VC’s have always liked risk; that’s their business. They all shoot for the fences trying to find the next Google, but what if they all bypass this next generation of company and the Google of the future doesn’t need their money?
I feel like the pendulum has to shift back at some point and the VC’s will jump back into the early stage investment arena but I wonder when that will happen. Will it be in 2011 or 2012? Maybe sometime even later than that?
The next 18 months promise to be an interesting period. The economy is showing signs of life, and new companies are showing life as well. How will the VC’s react and who will write the next big viral presentation entitled “Welcome Back Good Times; Let’s Take It Easy This Time Around”?
It’s that time of year again; where we look back fondly upon the year that was and look forward longingly to the year that will be. It’s a time of introspection and planning, and one filled with promise. In case you can’t quite tell; I actually like the holidays!
To that end, I decided this final Digital Influentials column of the year would be a recap of some of the best and most interesting companies we’ve uncovered over the last year or so. It’s hard to sift through the last 52 weeks of discovery and find the best of the best. One criteria I used was to re-highlight some of the companies we found of interest who DIDN’T get bought this year. The funny thing is when I reviewed the last 15 or so columns, about 40% of the companies we uncovered have already been purchased by other companies. I think this could be a business in and of itself! It’s highlighting the cream of the crop for your investment interests! J
So let’s move on with it shall we? Here’s our recap of some of the most fun, interesting, innovative we uncovered this year!!
Let’s start with shopping, which is certainly in line with the holidays. Check out MILO (http://milo.com/). Milo is a real-time shopping search engine that finds you what you want close to where you are. Just type in what you’re looking for and your address and it checks the current local store inventory systems to see what your local stores have in stock. From gym bags to LED TV’s you can find where to buy locally!
Speaking of shopping, why not shop for a cause with WORLD OF GOOD (http://worldofgood.ebay.com/), as delivered to you by eBay. If you use World of Good to shop for products they will guarantee you find the most eco-friendly, ethically sourced items and thereby drive positive global trade. No tariffs or taxes; just people creating things for other people. My favorite item thus far is the solar-powered flashlight. The idea is great; use the sun to charge the batteries and your flashlight will run all night.
Maybe your gift this year was fund-raising (ahhh, the gift of money). If you want to raise money and donate it to a worthwhile cause, then try using CREATE A FUND (http://www.createafund.com/index.php?route=home). They offer a simple way to crowd-fund an idea or an organization. Individuals can donate $25 or more and the aggregate can really be quite large! The masses have the money, so let them put it to good use!
If you’re searching for funding and you’ve got an interesting idea, check out KICKSTARTER (http://www.kickstarter.com/). KickStarter is a newish player in the crowd-funding category (people funding good ideas), but their spin is a little more user-friendly and it seems to be working. The site features artists, entrepreneurs, technologists and even fashion designers looking to make a break! It’s worth checking out – they can help make dreams come true for lots of people!
If you like the idea of a “personal shopper” for the holidays then you’ll love SHOP IT TO ME (http://www.shopittome.com). Just enter your favorite designer’s, your size, and the service will rummage through the web, uncovering sales and sites that have what you might want. It makes recommendations and facilitates your buying! Pretty influential, isn’t it?
Maybe you just like food? Sometimes the best place for foodies online is where they can check out the best pictures of food, so when you’re finished perusing your food porn with Flickr and PhotoBucket, check out PINTEREST (http://pinterest.com/). Pinterest is a social image-tagging site that allows users to “pin” a picture from any page of the web to their pinboard. Some of the most beautiful pages are the ones dedicated to food. Check out the pictures of cupcakes and pasta dishes and you’ll leave with your mouth watering and your eyes drooling (yes – I got that backwards on purpose).
Maybe you own a new up and coming social media tool and you’re looking for VC funding? Then review VENTUREMAPS (http://venturemaps.co/). VentureMaps allows you to uncover the investors in your area, or other areas of the US. You can get right down to the name of the people that you should be pinging, and it’s an interesting way to do so. Consider this a VC-stalker-starter!
If you love social media, check out COLLECTA (http://www.collecta.com/). Collecta came on the scene just last year, but it seems to be making quite an impact. Collecta presents a collection of recent, real-time search results that helps you see what’s going on right now. Type in any of the names for your favorite pop culture icons and see what’s being said about them right now! It’s “Human Nature” in action.
As far as iPhones and iPads go… the best by far this year was FLIPBOARD. Lots of other folks have come to play, but these guys are doing something truly unique.
With that, I wish you a happy holiday season! May it be filled with happiness and kindness… and innovative ideas for us to write about it 2011!
Thanks for reading!!