Archive for July, 2009

Talking to Entrepreneurs – Bay Schmooze IV

One thing that I like about talking with entrepreneurs is when you realize that a lot of what you know and take for granted is completely new to someone else. Two of the conversations I had yesterday were with entrepreneurs who are very early in the creation of their new busineses. Both are focusing on completely different different customers and attempting to solve different problems. However, they did have something in common. They are creating service business using the Internet as the place where they will conduct business.

I believe that anyone using a website as the primary communication tool between them and their customers should be either creating or re-designing their sites using software and tools that are designed to easily build communities, manage content easily, and support a wide range of media. This is not  based on some “Aha” moment of insight recently but from working with these types of tools for the past three years.

With so much press about MySpace, Facebook, LinkedIn, Twitter, WordPress, and other tools, I just assume that most people, especially in the age demographic of the entrepreneurs I was talking with, already know all about the capabilities these tools provide.

Entrepreneur one is about six month into development. The business is focused on providing information about an industry and the people and companies in that industry. Clearly this fits nicely into to social media/marketing space. I ask, “Are you going to provide your customers the ability to talk about their experiences, good and bad, with people and companies?”. “Not in the first phase, we are thinking about it as in Phase 2.

We talk about how the site is being created. The old way is to use standard web development tools including some combination of XML, CSS and PHPmaybe with something like Dreamweaver. Certainly a solution, but unless you become functional with these tools, you have to rely on a web developer for all changes to the site , which can be time consuming, frustrating and expensive (I realize that there are some supposedly higher level tools to help with changes like Contribute, but learning Contribute and managing content on a blog are miles apart).

Being so early into the development, I ask if they had considered using a Content Management System(CMS) based solution like Joomla or Drupal? More importantly they are open source (think Free Software), and have all the basic community tools built in. They hadn’t heard of this but were dealing with slowness of getting content on and off their current site.

Entrepreneur two is just beginning and has not selected a platform as yet. In fact, getting some insight on what to consider was among the list of things she wanted to find out during the Schmooze if possible. We had the Open Source conversation. She asked if I know of any developer resources that I would recommend, and I tell her about the San Diego Drupal Users Group that meets monthly (currently at the Hall of Champions at Balboa Park). I also mention that, if she wants to learn more about Drupal, meet more people and talk with some great resources from both San Diego and LA, there is a LA Drupal Camp scheduled for August 8th and 9th at UC Irvine. It is free, all you have to do is sign up.

Someone else mentions looking at similar, complementary  or competitive sites. She says she is having difficulty finding out who is talking. I ask if she knows about Technorati? “Doesn’t that have something to do with blogs?” I explain what Technorati is all about, and she writes down the web address.

Whenwe have been working in an area for a couple of years, especially one that is still pretty nascent to smalland medium business, we tend to forget who much we really know. So, it is great to talk with people who are just starting out and all this is new to them. You get to share some information, hopefully help them move forward and feel good about the conversation as time well spent.

Bay Schmooze IV – Interesting Concept

Yesterday morning I joined a large number of entrepreneurs and some investors in a rather interesting setting. Marco Thompson, who is very well known in the San Diego business community especially for creating unique venues to showcase entrepreneurs, put together Bay Schmooze IV at the end of Mission Bay park.

It started at 7:30 AM with lots of coffee, some bagels, pastries, fruit, OJ and other assorted goodies to get you started followed by a number of choices for anyone who wanted to get their brains and bodies started with exercise for about an hour. Then from 9:00 to around 11:00, people got to network.

So, how many people will actually show up at 7:30 on a Saturday for three and a half hours of networking at the beach? Surprisingly, around 90! 

On Friday, I met with an entrepreneur and while we were talking he asked if I know Marco and had I been to any of his Schmooze events. Although I do know Marco, I was not familiar with the Schmooze events. Friday afternoon, I got two emails from Marco about the event with one chiding investors for not signing up. After all, if 70-80 entrepreneurs could drag themselves out of bed to attend, why couldn’t investors? Hearing about the event from two different sources, so close together, got me curious to see what this was all about.

I have to say, that I thought the time was well spent. I was able to re-connect with a couple of people, and hear about some interesting new companies from enthusiastic entrepreneurs. In fact, I am looking forward to Bay Schmooze V.

Thanks for the invite Marco!

Is Video in Your Company’s Future?

If you are starting a new company or expanding an existing one and video is not in your future, I have one serious recommendation, Re-Think Your Future!!! Many businesses are now adding video to their websites to take advantage of video’s ability to give exposure, brand the company, increase traffic and increase conversions.

Recent research from Vovici, a pioneer in the enterprise feedback management space, showed that about one third of online retailers use videos on their sites. Video is exploding in just about every demographic. Online video is expected to grow 45% from 2008 to 2009.  Think about these other stats:

  • Comscore, a leader in digital market intelligence, reported that a record 14.5B, yes that’s billion, videos were viewed by US Internet viewers last December.
  • Neilsen Online reported that 65% of online video views stream between 9am and 5pm Monday thru Friday. Their guess is that people are at work where faster Internet connections exist.
  • Neilson’s Q3 2008 Mobile Video Report showed that 5% of mobile subscribers access video on their cell phones each month.

Now you just have to believe that all this hoopla about video must be grounded in results. Well one of the biggest results is that search engines, for whatever reason, like video along with web sites that are constantly updating their content. There are lots of articles about Search Engine Optimization (SEO). Well adding video is one of the techniques that can get you higher in search results.

You might be thinking, what types of videos can I use? How about using a video of the CEO on the home page talking about your products, technologies, or what’s new at your company? Or, how about using videos as part of your FAQ section? You can use videos for product demonstrations or training. After all, if you can get more than 10 million people to view what happens when you add Mentos to 1 Liter bottles of Diet Coke, than wouldn’t you think you can double or triple visitors to your site and then keep them entertained or informed about your company?

So, if you haven’t thought about using video, maybe you should. You can bet that some of your competitors are.

Are Startups Still Receiving Funding in Southern California?

I wrote this post earlier today and put it up on Startup Coast but thought I would re-blog it here.

This is one question that I have gotten quite a bit by entrepreneurs who are currently pitching or thinking about pitching their companies. There is a lot of rhetoric out there, so I decided to see if I could find some information on my own.

I went over to SoCalTech, where Ben Kuo’s team has been tracking investments in SoCal companies for many years, and here’s what I found out. 47 investing groups have invested in 105 early stage deals in the first half of 2009. The highest was Tech Coast Angels with five Seed and one 2nd round fundings. Now I am pretty sure that these numbers are down versus previous years, but not exactly zero.

Next, I thought I would see what the national numbers looked like. The Angel Capital numbers for 2009 are not out yet, but Price Waterhouse’s Money Tree Report is available for 1Q09. This shows that there were 549 deals representing $3.0B of investment. Of this, 47 were startup/seed investments worth $169M and 157 were early stage worth $683M.

Again not record breaking, but having $852M of VC funding going into early stage companies is no small amount. So, what exactly is the problem and why am I being asked this so often?

I think that one answer is that, overall, early stage investments are down while the number of people who think that a down economy is the perfect time to start a business. Result, is a bigger group of people going after a smaller amount of money. So the bar gets raised and entrepreneurs need to up their game to get noticed. You need a great story, documentation, with significant investor potential.

I also think that entrepreneurs are running in to investors who just don’t have available cash. The Exit landscape hasn’t been too rosy over the last 18 months. So, you have a lot of investors, especially in the Angel space, without cash. I think that a lot of them would rather tell you to get more traction, or fix some other problem with your opportunity rather than admit they are out of cash. Maybe if you work on your business a while, they will have money by the time you are done and come back to them.

The bottom line is that early stage companies will continue to be funded, but those that do will stand out head and shoulders above the rest. They will have compelling stories offering great returns for the investors, solve big problems that people are willing to pay for, and they will have squeaky clean documentation that meets investor expectations. What meets an investor’s expectation? Try asking before you decide to pitch!


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