Tips for Tech Entrepreneurs: Moving out of the Coffee Shop

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At the inaugural SF East Bay New Tech Meetup last week, Lawrence Coburn, the founder and CEO of Rate It All, gave aspiring entrepreneurs some valuable tips for “getting out of the coffee shop” and getting VC funding. Coburn’s venture – Rate It All, an online distributed consumer rating company, that allows users to find, share and solicit opinions on any topic, completed a $1.4M raise in September 2008.

Here are 4 key elements, according to Coburn, that a venture needs in order to get funding:

Solid Team: When Coburn initially kicked off his venture, he had meetings with many VCs who liked his business plan but weren’t ready to invest in his company because he was a one-person operation. The reality is that it’s risky for VCs to fund solo operations because if the entrepreneur got “hit by a truck” tomorrow, the venture and their investment would go down the drain. So Coburn made the point that VCs are most likely to fund a venture with a solid team and a clear game plan for succession to keep things going if anything goes wrong.

Product: A key point that Coburn brought to everyone’s attention was that VCs will no longer fund business plans  or concepts, so the venture needs to have a solid product or service that’s marketable. Given the competition for the VC funds, having a plan is just not enough as the funding will go to an existing product or service with a clear marketing strategy because that translates into lower risk for the VCs.

Traffic: Even when Coburn was working out of a coffee shop, Rate it All was revenue generating, making over $200K and yet, he couldn’t get funding right away. So, while revenue-generation is great, but it’s still not a guarantee that your venture will get funded. Having a revolutionary product or service is a good first step but to get funding, entrepreneurs need to make sure they’re focused on generating traffic right away (and revenue would be nice too).

Comfort level and Trustworthiness: Last but not the least, VCs want to fund someone they trust and are comfortable working with. This was a very insightful tip by Coburn and that was VCs need to have a certain level of comfort doing business with you - the entrepreneur. It also helps to be known in the industry and connecting with influencers who can help your cause. Some ways of making those connections and increasing your visibility is through speaking engagements and attending networking mixers where you have the opportunity to meet some of the influencers. He also said that inviting some of these influencers as advisors on your firm’s board will also add credibility to your new venture.

Overall, it was a brilliant talk by one of Silicon Valley’s best and brightest entrepreneurs. Coburn also went on to list several key technologies that are revolutionizing the online space including – Facebook Connect,Posterous, and the very well-known micro-blogging site - Twitter. Despite all the new technologies on the market today, Coburn reiterated that email still remains widely popular and is the primary way folks share online content today. He also pointed out that 90% of Rate It All’s 1.3million traffic comes from natural search so businesses shouldn’t underestimate the power of SEO either.

SAP and Intel Discuss Enterprise Social Media

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Recently, I joined fellow marketers and PR professionals for a panel discussion on “Social Media Adoption in Large Enterprises” hosted by Third Thursday Meetup, at the SAP campus in Palo Alto. After an hour of quality  networking over generous portions of appetizers and crisp white wines from local vineyards, we settled down  for an evening of insightful panel discussion with Ken Kaplan, New Media Manager at Intel and Donald Bulmer, VP of Industry and Influencer Relations at SAP.

The moderator Jen McClure did a good job of moderating the two-person panel with many thought-provoking questions. Overall, it was a solid discussion and both panelists provided a fascinating perspective on how social media is being deployed by two of Silicon Valley’s largest enterprises.

Here are some interesting insights from the discussion:

Innovation and thought leadership: Dan Bulmer credited the current economy as ideal for fostering creativity and innovation. According to him, tight budgets and current economic climate have made it easier and paved the way for social media  adoption in large enterprises. Kaplan offered a great insight from the PR perspective as to how social media has revolutionized the communications space. In the past, press releases used to be an one-time event, but now thanks to blogs and social tools, a press release event can go on for weeks. To promote innovation, Intel works closely with industry thought leaders and many prominent bloggers are on Intel’s internal blog council. They consistently leverage thought leaders from the social media space to create and foster social media best practices.

Efficiency: The budget cuts have impacted three primary areas – events, ads, and travel. The budget cuts have ranged between 30-50percent, however, the goals for the organization have stayed the same or have grown. For SAP and across the industry, while advertising spend has been cut, additional resources are being diverted to social media, because it’s perceived as a more efficient way to generate results. Bulmer mentioned how virtual tradeshows are fast becoming more prevalent as an efficient channel for driving results at lower costs.

Customer Engagement: SAP’s approach is very community-focused, they use web 2.0 collaboration platform to bring their customers together based on common products they use. They expose customers to SAP products as well as connect their customers to others who also use the same products. They leverage social media technologies to foster a strong user community and also, enhance SAP’s relation with their customer base. Kaplan was pleasantly surprised to discover their customer’s passion for Intel’s processors when he came across on tweets like “Loving Intel Processor” on the popular micro-blogging site, Twitter.

Collaboration: Bulmer’s approach was extremely pragmatic and he said, that he wants the  business units to have “skin in the game” to make them more accountable for the deployment as well as results. His group doesn’t take more than 5-10percent stake in any social media project, which forces the businesses to take responsibility for their activities and consequently, the results. McClure had a great question about how the two professionals dealt with the challenges of deploying social media across large enterprises with highly multi-cultural and multi-national presence. Fulmer had a great point and which was to drive social media adoption, you  have to associate social media with success  because success  tends to be culture-agnostic and that in turn has helped adoption. Kaplan’s approach was to decentralize the deployment because he believes (and rightly so) that social media is not scalable and it has to be driven from individual regions and centers. Kaplan referred to the key role that Centers of Excellence (COE) play in deploying best practices and knowledge across a global organization.

Monetization: What particularly resonated with the audience was Bulmer’s approach and philosophy to social media, which he called “purpose-driven” engagement. He encourages folks at SAP to engage in social media with a specific intent and purpose, which forces them to stay productive and efficient. He seemed to be very cognizant of how social media is often dismissed as “fluff” and this awareness was reflected in his highly monetization-oriented social media strategy. According to Bulmer, SAP is already generating thousands of leads from their social media efforts and many of those are about ready to close.

Corporate culture enhancement: Kaplan had an interesting observation that although silos are breaking down they haven’t completely disappeared. However, social media has certainly forced people from across the organization and different functional groups to work together.  He urged folks to find the communicators and the experts  in the organization who can then engage with the customers. .  Both SAP and Intel offer a variety of information resources to their employees on social media. At Intel, these are structured like college courses ranging from #100 to #500 level courses depending on the employee’s level of engagement. Both panelists agreed that getting the right people within the company involved and engaged is the key to social media success.

All in all, it was a very relevant discussion, especially as more companies are getting serious about social media adoption. It was great to get meaningful  insights from these two seasoned professionals on the real challenges and opportunities in deploying social media in the enterprise space.

Inside scoop on SV New Tech July Meetup

Last Tuesday, I was at the Silicon Valley New Tech Meetup in Palo Alto. The line up was great as usual and the only downside was that they were all out of pizza even before I got there, oh well…there’s always the wine. Here’s the scoop on the new ventures who presented there:

The first one was www.kwiry.com, presented by founder Ron Feldman. “You can text it before you forget it with mobile txt message reminders to your computer.”

This is a nifty tool to remind yourself of everyday important details by texting it to the kwiry website. Kwiry adds a social component to the query, it allows folks to search through the reminders, add comments, it has a Facebook application, integration with Twitter and yes, there’s also a mobile version of the site.

Show me the money: Their response to business model question was that the site serves up search results and product results, both of which are monetizable through search advertising and product advertising. One intriguing idea they’re working on - pilots with offline media companies, where the brands could leverage the site to do product marketing campaigns. One test case was with Mustang, where customers were encouraged to text kwiry for more information on Mustangs. 

 www.websketch.com – Presenters were Scott Tse – founder/prez and David (who seemed to be the king of everything else that needs to be done). It’s an online web design and hosting service for the average user, ie. someone without programming experience or html training, very unlike the average audience at this Meetup.

Based on the demo at this Meetup, it seemed very easy-to-use and the UI was very slick and intuitive. You have the ability to drag and drop your new website into reality with interesting use of images that scroll, embedded videos, and scrolling pages to create very professional-looking pages. One of their customers is Ducati motorcycles. The presenter created a snazzy-looking webpage from scratch in under a minute. The site also has Flickr integration so you can easily use pictures from your Flickr account. The tool is 100% browser-based with expected integration with YouTube in a week.

Show me the money: Currently, like the gazillion other start ups out there, this site is also free. Their plan is to grow the user base and then start charging a fee but I think this model is very sketchy.* The main issue with the site is that you can’t transition your webpage to another server, the pages have to be hosted on their site. I wonder how many of their users would be willing to get locked into a third-party site for their business website without knowing the terms of the contract? Also, currently there is no customer or database support available so that’s other deterrent for small-businesses which seem to be their primary target.

*Meetup organizer Vincent Lauria had a great suggestion which was to grandfather the early adopters into the system so you don’t lose them when the site goes live and you reward them for taking a chance on your idea.

Note: I tried to access the live demo on the site, but I got an error message even though I had IE 7. Sorry, but your browser is incompatible. “You may only view pages with Firefox 2 & 3, Safari 3.x, or Internet Explorer 7 and edit pages with only Firefox 2 & 3 or Safari 3.x+”.

 www.LaunchSplash.com pitches itself as filling “a need of 100% of web startups – drop dead simple launch pages for your upcoming site – build community before you even have one.” Presenter/founder, Jacques Crocker did a great job of demonstrating how easy this application is for use. This is a great option for folks like me who register a ton of domain names and end up with a dummy page with tons of crappy links. The application is quite simple and all you have to do to get started is to enter name of your domain into the search box. It offers several different templates with RSS feed and ability to capture email addresses from visitors so folks can sign up while your site is being built. The preview option shows you what your page will look like. You can also host the page at your own domain by mapping the IP address.

Show me the money: The revenue model is simple fee-based subscription model where the basic page is free, and the plans start  at $5/mthly and go higher depending on the selected plan. The founder has no intention of opening the site up for third-party developers… yet.  

www.ZoomProspector.com helps business find the right location through a variety of attributes such as college education of the labor market, property prices, and even income. The data provided through this site is incredibly extensive. The founders, Chad Catacchio & Anatalio Ubalde claim that their tool offers Map data that’s much deeper than Google, Yahoo! maps and all the other data sources put together. The site which was featured on TechCrunch earlier this year uses data from the local governments.

Show me the money: The revenue model was somewhat vague and very ‘Googlesque’, they talked about how they want to ‘liberate’ the data so access to all information is free. They seem to be targeting local governments who will leverage this data to attract new businesses. The plan also seems to be to monetize through advertising and driving traffic to client communities. The site’s currently in closed beta and access is through invitation code only. Note: For those aspiring for an opportunity with a startup, they are hiring.