The Ingredients for Startup Success

In my post about the success of Sysomos (which was acquired by Marketwire earlier this week), I talked about how Sysomos benefited from great timing – having the right product at the right place at the right time. This, of course, is just one of the many ingredients that, along with a healthy dose of luck, have required for successful startups.

So, what else does an online startup need to make it?

1. Perhaps the biggest “ingredient” is having a service that meets a need in a new or different way. Too many startups are vanity projects that cater to someone’s personal interests or needs as opposed to the larger market. They fail because they serve a niche that is far too small to create a viable company.

2. The service must be easy to “get” what the startup is offering and why a potential user should care. In the multi-tasking, time-strapped world in which we live, startups have small windows of opportunity to capture someone’s attention.

If consumers fail to quickly understand the service is being offered, they’ll quickly move on. This means a startup needs messaging that is clear, well-articulated and user-friendly. I’m personally a big believer in the power of the demo video because many people will watch a video before reading even the most well-written text.

2. The service or product has to do the job well. This is something that should be a given but you’d be surprised by how many startups create mediocre or, worse, bad services. This includes startups that launch an alpha or beta that instantly disappoints. Even if the messaging is clear, a bad service will quickly kill any interest from consumers.

4. The service has to be intuitive and user-friendly. Any hurdles, or “grit”, will quickly kill any kind of traction. This starts from the registration process to how quickly someone can start using the service or product. People have little patience, and want a gentle learning curve so having a service that is intuitive and user-friendly.

5. Fanatical customer service is also a key ingredient, particularly in the early days when a service is still being developed. The ability to quickly and effectively deal with problems or issues and actively solicit suggestions and feedback can make a huge difference.

6. Identify and nurture your champions and evangelists. As much as great messaging, terrific customer service and being active within the social media community are must-dos, the real marketing magic happens when a user is so excited with a service that they enthusiastically and actively start telling anyone and everyone. By identifying and supporting these people, a startup can jump-start its marketing and sales efforts.

There are, of course, a lot of other variables that go into creating successful startups such as having terrific employees and, if required, financing, but the ones above are “low-hanging fruit”.

What do you think are the most important “ingredients” for a successful startup?

Posted in Web 2.0, Web-based Services | Tagged , , , | 4 Comments

Sysomos: Life in the Eye of the Hurricane

As many people probably know, Sysomos, which provides social media monitoring and analytics services, was acquired earlier this week by Marketwire. I’ve been actively involved with Sysomos for the past 18 months as its director of communications.

To say the least, it has been a fascinating experience to see the company evolve from a two-person operation out of the University of Toronto into a fast-growing market leader with customers around the world. In many respects, it’s been like living in the eye of the hurricane in which everything happens so fast – new customers, new products, a new office, new employees and more recognition as an innovative player.

Sysomos is the fourth start-up in which I have worked. The other three – Blanketware, PlanetEye and b5media – were nowhere near as successful but they were tremendous learning experiences.

That said, I’ve always been curious about what it would be like to work for a start-up that had the exactly the right product at the right time at the right place. Sysomos was – and is – that kind of company.

After spending three years developing the technology, Nick Koudas and Nilesh Bansal officially launched Sysomos in late-2008. Over the next few months, Sysomos started attracting interest in its flagship MAP analytics service, and, as important, customers. Sysomos then launched Heartbeat, which quickly gained major traction in the social media monitoring market.

Looking back, what was probably most impressive about Sysomos’ early days was the conviction that its service had real value and customers should pay for it. This was impressive in a world in which free reigns supreme, even for services that offer plenty of utility.

Not to take anything away from Sysomos’ leading-edge technology or the people who have fuelled its growth but, in many respects, it was a beneficiary of great timing. The social media monitoring and analytics market started to gain serious traction in 2009 as more companies recognized social media was becoming a viable and attractive communications, marketing and sales vehicle.

Sysomos was there with impressive technology that met real needs in a way that differentiated itself in an ultra- competitive market. While I’m clearly biased, I truly believe Sysomos’ technology and services are the best, and I have looked at a lot of social media monitoring services.

With Sysomos now part of the Marketwire family, I expect its growth will become even stronger. It’s really hard to believe how far one of Canada’s hottest start-ups has come in the past 18 months.

That said, Sysomos’ success really comes as no surprise. When Nick Koudos showed me MAP for the first time in his office in January 2009, it was immediately obvious it was something different from anything I had seen before.

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Social Media Hiring: The Bad and Good

On the Sysomos blog, I recently did a post looking at the biggest social media mistakes made by companies, and the things companies should focus on to make the right hiring decisions.

The Mistakes:

1. Hiring people based on enthusiasm rather than experience. Many senior executives don’t understand or, for that matter, use social media so anyone who just has a modest amount of insight about social media comes across as knowledgable. The problem is enthusiasm doesn’t mean someone can use them effectively to meet a company’s strategic goals.

2. Hiring someone with a limited skill-set. People doing social media are “corporate soldiers” fighting on the front lines every day. As a result, they see a variety of inquiries from customers, potential customers, partners, investors and suppliers. This means they need to handle multiple roles – customer service, marketing, business development, sales, etc. If someone doesn’t have the experience or knowledge, they will have a difficult time doing the job without a lot of supervision.

3. Hiring cheap. Given social media is a new corporate activity with uncertainty about ROI, many companies are hedging their bets by hiring cheap. It works because there are lots of people excited about having a social media job. The reality, however, is you usually get what you pay for. Instead, companies need to look at offering more money to attract better candidates with deeper skill-sets and experience.

4. Under-staffing. Another cost-saving measure when it comes to social media is taking a conservative approach to hiring. Most companies start with an individual as opposed to a small team, even if their strategic plan is ambitious and multi-pronged. This is despite the fact the tactics and content creation to support social media programs can be labour-intensive. It explains why many companies’ social media efforts fail due to a lack of execution.

5. The lack of investments in tools to make social media activities more efficient and productive. Even though many social media services are free, the tools to support their use can cost money. Whether it’s monitoring services, publishing tools or ways to automate content distribution, an investment in a solid social media toolbox can make the difference between success and failure.

The Right Approach

To start, companies need a strategic plan or roadmap about where they want to go with social media – even if their initial foray is relatively modest. This will provide insight into the person who should be hired first, as well as those who could be hired later.

For the first hire, the focus should be on someone who has a variety of skills, including, of course, experience with social media.

This person needs to have strong communication and writing skills, as well as a good grasp on marketing and business development. Having someone who can also provide strategic insight would be valuable.

This is important because a company’s initial efforts will play a major role in whether social media will succeed or fail. As a result, it makes no sense to hire someone who lacks enough experience or the right skills.

In other words, don’t hire a junior employee simply because they are inexpensive and enthusiastic about social media.

With a solid person in place to establish a social media program, companies can then look for social media evangelists and tacticians to help support day-to-day operations.

These are people who are going to be on the front lines, talking to people online or in person at conferences, meet-ups and other events.

Again, you want people with strong communication skill, and enough confidence and experience to know what they can handle, and when they need to circle back for support.

These positions can be high-pressure given the flow of information come at them so it is important to have people who can stay cool when things get hot.

If there is enough social media activity to justify the investment, it makes sense to hire people to monitor social media activity. While this is a tactical position, it requires people with enough knowledge and experience to recognize situations that require attention and action.

At the same time, these people also need to quickly determine whether specific social media activity should be routed to particular departments so they can take the appropriate action.

The hiring process depends on how a company wants to approach and embrace social media. Regardless of whether it’s a small operation or a significant part of the business, it is crucial to hire people with the right skills and experience.

This is particularly important for the first person hired because they can make or break your social media efforts.

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Who's Doing Social Media Well in Canada?

As a rule, Canada trails the U.S. by about two years when it comes to the Web. For example, e-commerce lagged in Canada while it roared ahead in the U.S., and Canadian companies stood on the sidelines for far too long while Web 2.0 became all the rage south of the border.

In many respects, history is repeating itself when it comes to Canadian companies and social media. In the U.S., social media is increasingly become a key part of how companies communicate, market and sell their products and services. In Canada, not so much. Sure, there are a handful of active companies such as Rogers, WestJet and Molson but I would argue they are exceptions to the rule as opposed to examples of widespread adoption.

This inactivity was abundantly obvious in 2009 when the economic downturn was at its height (assuming we’re not heading into a double-dip). In fact, there was so little interest in social media activity that I intentionally didn’t position myself as a social media consultant because there didn’t seem to be enough business to justify it.

Fortunately, this situation has changed over the past six months. A growing number of companies, particularly smaller businesses seeking a competitive edge, are expressing more interest in social media. But we’re not talking about a wave of activity. It’s more of a gentle crest coming over the horizon.

Given the pace at which Canadian companies embrace new online trends, it’s no surprise that social media is following the same conservative path. Nevertheless, it’s still a little discouraging that there’s not more happening, although I remain optimistic it’s only a matter of time.

Any suggestions about Canadian companies – big or small – doing well at social media?

Posted in Social Media | Tagged , , | 5 Comments

The Power of the Corporate Demo Video

As an ex-journalist, words have power. They can deliver a wide variety of messages and stories that can resonate with readers across the spectrum of emotions.

Despite my enthusiasm for wordsmithing, I’m also a huge fan of the demo video to help companies communicate who they are and why it matters. In a world in which people are multi-tasking and increasingly time-strapped, I tell clients that you can offer people compelling and well-written text but, if given the choice, they will watch a demo video most of the time.

It was interesting to read a post this morning by Michael Arrington about a new demo video for Blippy, the social service in which you share purchases publicly by providing the company with your credit card information. The video was done by Transvideo Studios, whose clients include Mint and Box.net.

The video is certainly good but I would suggest (and this is a very un-Canadian thing to do, especially on July 4) that some of the videos that Seth Singer and myself have created recently compare favourably.

We’re particularly excited of a demo video done for GridCentric, a Rogers Ventures portfolio company that makes virtualization software so companies can scale their computing resources in real-time to meet demand as opposed to having excess “just in case” capacity. In creating the video, we not only gave GridCentric something they could use for sales, marketing and financing purposes but helped them with their core messaging.

Here’s a video that we created for Sysomos for a new service called Audience that will measure social media ROI.

Demo videos are not inexpensive, which can be surprising given the online world’s obsession with free. But – and this is clearly self-serving – they are very solid investments with a great ROI because they can be used for a variety of things – everything from explaining to consumers what you do to marketing, sales, business development and finances.

If you’re interested in learning more about what’s involved in creating a corporate demo video, drop me an e-mail at mark@markevans.ca.

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An Ounce of Mobile Prevention?

One of the biggest controversies within the high-tech world is whether mobile phones are dangerous to our health. Does the use of electromagnetic radiation mean there’s a chance it could cause cancer, particularly for people who are heavy mobile phone users. In a recent New York Times opinion piece, Maureen Dowd wondered if mobile phones are the new cigarettes.

So far, scientific and medical studies have downplayed the risks, although they have not been categorically dismissed. So the question is whether mobile phone users should, at the very least, be aware of the potential risks, and take preventative measures. Even though the mobile industry contends its products are safe, should consumers simply buy in, or protect themselves just in case the studies are eventually proved wrong?

To be honest, it’s a subject I didn’t think much about until getting approached by Mark Brennan, who runs Montreal-based MSB Communications, which recently started to distribute a mobile phone cover from Pong Research that purports to “reduce cell phone radiation while maintaining full signal strength”.

According to Pong, FCC-certified laboratories found that its products reduces hot spot cell phone radiation by 85% and overall cell phone radiation by 60%. When Brennan offered to let me try the Pong product, I was curious to see what was involved.

To start, the packaging definitely stands out with the message “Reduce Radiation” front and centre. But when you unpack the box, the mobile phone cover doesn’t seem be much different from a “normal” mobile phone cover. I was expecting something more dramatic. It’s like going to the dentist, and having them put a thin blanket on you when they take X-Rays as opposed to the heavy vest.

It took about 15 seconds to install the funky green cover on my iPhone. To be honest, I like the idea of having something that could protect me from radiation. Who knows if there really is a risk but having a Pong cover is the “better safe than sorry” approach, which is difficult to argue against.

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Silicon Valley's Obsession with Free

Let’s get the facts straight here: Foursquare doesn’t have to have a business model, it has “only” 1.5 million users in a market that appears to be a more niche than mainstream….but it still manages to raise $20-million in venture capital in a round led by Marc Andreessen and Ben Horowitz.

Call me a skeptic but I don’t get it. It’s hard enough attempting to justify why Twitter has attracted more than $100 million in venture capital but at least it has 125 million users around the world. Nevertheless, there appears to be widespread enthusiasm for the deal.

The reality is none of this really matters to Silicon Valley, which invests in potential and possibilities even when the rest of us are scratching our heads. This is what makes Silicon Valley, Silicon Valley, and probably why the success rates within venture capital are so low.

Foursquare is another example of how start-ups that gain traction with a free service are so difficult for evaluate financially. Even when they are wildly popular, investors need to take a leap of faith in their continued growth and their ability in getting users or advertisers to start paying for the privilege of the service, its users or features.

Sure, there are a variety of potential business models for Foursquare such as local advertising and mobile commerce but it’s just talk until the money starts flowing in.

Silicon Valley, however, loves sexy stories with buzz in emerging markets – even if it is still unclear about the economics of these markets.

Hats off to Foursquare for raising $20-million but the one stark truth is money can’t buy happiness, and as Twitter has discover, it can’t buy a business model that will validate the venture capital being raised.

As much as it might be difficult to avoid the temptation to invest in Foursquare, particularly for anyone who missed out on Twitter, it’s still a risky investment given it is uncertain whether Foursquare is a novelty or business.

Posted in Social Media, Venture Capital | Tagged , , , , , | 2 Comments

How Much is Your Blog Worth?

How much is your blog worth?

I’m not talking about the value of the site but, more important, the value of all the content you’ve diligently written for the past months or years? For many people, it’s like the MasterCard commercials: priceless.

I mean, can you put a value on the hours of work, the amazing amount of creativity and brain cycles that have been invested in pumping out blog posts? Personally, I have close to 10,000 posts from three blogs that are still active. To lose them would be devastating.

So, what’s it worth to back up all of that blog content?

VaultPress suggests that in an ideal world, it’s $15 to $40/month for a one blog. Despite the fact your blog content is invaluable, $15 to $40 seems expensive, especially that we live in a world in which paying nothing is par for the course. The question is how much would people really be willing to pay to back up their blog content. My sense is that maybe $5/month.


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Huh, Social Media Without a Strategy?

An essential part of social media is having a strategic plans that addresses why a company wants to do social media, the goals and objectives, how success will be defined, who's going to make social media happen, and how it will be integrated into sales and marketing activities.

So is was pretty surprising to see a recent study by Digital Brand Expressions in which 78% of respondents said they are using social media but only 41% have a strategic plan.

At first blush, it seems bizarre that companies could embrace social media without a strategic plan – something that is probably applied to other parts of the business.

Of course, it goes without saying that not having strategic plan is a huge mistake but many companies are jumping into social media armed with enthusiasm but, unfortunately, little else.

It explains why many companies are frustrated and disappointed when their social media efforts fail to make an impact. This often causes them to withdraw from social media, which is another mistake.

Like any business activity, social media needs a strategic plan before for it to be launched. Given its importance and need, companies need to invest the time and effort to go through this process. It may be a necessary evil because a strategic plan takes time to create but it has to happen.

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What's a Social Media Consultant?

Given how much time I’m spending with clients exploring social media, this LinkedIn discussion caught my attention:

“For the people who are or claim to be Social Media Consultants/Gurus, why would people want to hire you? What differentiates you from others. What have you done to get this title? For those who truly are Social Media Gurus hopefully this will make you stand out. Tired of seeing all these social media consultants pop up.”

It’s an interesting topic because there are so many social media consultants (including myself). The challenge for many companies is figuring out what this means given anyone can hang up a shingle. At the risk of peeing in the pool in which I swim, many “social media consultants” are people armed only with a Twitter account and a blog.

But at this stage in the market’s evolution, they’re more knowledgable than most people so it is easy to establish themselves as professionals even though this knowledge might be an inch deep and a mile wide. This is not to suggest they don’t have good intentions or do solid work but their credentials and training may be limited.

So what should companies be seeking in a social media consultant?

To start, a social media consultant must have an in-depth knowledge of the different services, how to use them effectively, and other tools that make doing social media more productive and efficient.

A social media consultant should also have a solid background in communications given content is such a key part in making social media work well. The reality is services such as Twitter and Facebook are just tools to distribute stories in new and different ways. Without good stories, it’s like trying to drive a car without gas.

Another important consideration is having a good understanding of how businesses operate because social media needs to be integrated into a company’s operations as opposed to being a standalone activity.

The knowledge of how social media fits into the overall strategic landscape makes it easier to create strategic and tactical plans on how it should be used. This is particularly relevant given the growing focus on ROI as companies look to justify their spending on social media.

Finally, social media consultants should be good at sales but honest about what clients should be doing. While social media continues to attract a lot of hype, there are many companies cautious about climbing on the bandwagon, even though it makes sense to do so.

As a result, social media consultants often need to educate companies about the opportunities, and why social media has so much potential. At the same time, they should also be willing to tell clients that adopting a walk before you run approach or not doing social media at all makes sense even if it means a smaller consulting fee.

What kind of skills or attributes do you think a social media consultant should have?

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