Tuesday, April 28, 2009

The New Marketing Mix: Marketing in today’s Social Age

Scott Kirsner recently wrote in his Innovation Economy column - Increasingly, marketing isn't just one-way street
, about the ways marketing and advertising are changing in the new social era we face today. The idea behind the new trend is that, instead of interrupting people, you get them to discover your product or services – as a conversation.

There is no denying that social media, like Twitter, Facebook, BzzAgent and LinkedIn, have changed the way we discover new products. Now more than ever customers have a voice in what companies do and how they market to them…or do they?

If you are a big brand, with a big budget, you have a lot of options – you can buy media, and continue to interrupt people. You probably need to do that because if you need to reach a lot of consumers, fast, social media is not the answer. It just doesn’t scale as you can scale a media campaign. Then, not all of your customers want to participate in a conversation. Then there is the noise level – big brands need to interrupt as we simply can’t process everything that is coming at us. We know that whoever screams the loudest the longest must have something to say. Expensive you say? You bet.

As any new start-up, aiming to conquer the consumer mainstream for the first time, finds soon enough, getting people to notice you costs a lot of money. Usually over $100 cost per customer acquisition. Well, at least initially.

At a recent MITX mobile event, Brad Rosen shared his not-so-favorite ad campaign outcome he had for his iPhone Drync app during MacWorld. He spent $2,500 in banner ads and discovered that his cost per acquisition is well over $100. He says he much prefers chatting with people directly on Twitter – he not only gets a conversation going, but also paying customers for (almost) no money.

Although I agree with Brand that bootstrapping a start-up is the way to go these days, I have to warn entrepreneurs that the secret to marketing lies in its mix – there is no one way, or one channel you can use to build a business. You need a social media and an ad mix – and you can be creative and not pay through the nose for that. Then for media buys to make sense and have a reasonable ROI, you need to think about two things – frequency and reach. Media buys are not short stunts – they require commitment over time so you can reach enough people enough times so they notice you. If you are seen one, you are not seen at all. You are seen twice, you are not seen at all. If you are seen three or more time, you are now on people’s radar. Then set your expectations – it will take longer that you expect to build your business – it always does.

Sunday, April 12, 2009

How to Raise Money from VCs and Investmet Banks

Attended ENET’s Raising Money from VC's and Private Equity
this past week too. Three companies presented: Sole Envie
, a site where you can custom design your own shoes, RedStart Systems
, a speech interface technology, and JumpToGreen
, providing interactive green labeling system for those who want to buy green. Sole Envie and RedStart were looking for money, Jump to Green – for partners. After their short pitches, Dayna Grayson, Principal, North Bridge Venture Partners
, Nia Stefany, Managing Partner, Xnergy.biz
, and Peter van der Meulen, Founder and Chairman, BlueShift™ Technologies
, each gave their take on how to raise money.

Dayna talked about what makes a good pitch for seed funding. Her advice:
1. Always start with the team (not sure I agree – it is better to start with her #2 if you ask me).
2. Then go into your idea/ elevator pitch. An elevator pitch sounds like this: “this service will be for this market, the current alternative is…we are better because…”
3. Next, identify the market pain and what is also known as total addressable market or TAM. TAM is a number that your team needs to arrive at based on the % of the total market you can defensibly get. E.g.: this is a problem in a market that is this big.
4. Go into the solution – share use cases and examples but don’t go overboard with the slides – a couple of slides should do it.
5. Then go into how you are going to make money
6. You also need a slide on the competition
7. And, finally define your go-to-market approach – or what you would do next once you get the seed money.

Nia represented investment banks, which usually get engaged with Series A and B companies, mostly revenue-generating (especially biotech). From her perspective here’s what investors expect:
1. Great management teams – people who will know what to do with the money – people who know how to build a good product, and team with a strong CFO.
2. Skin in the game from the management team – they want to see that the initial round of investing was partially subsidized by the management team.
3. Companies with strong barriers to entry and competitive advantages – companies with defensible patents, customers and relationships.
4. Wise spend – no high salaries, not a lot of money on marketing, with well-defined use of proceeds.
5. Achievable ROI
6. Businesses with strong growth potential and scalability
7. A good CFO
8. And reasonable valuation

Next meeting: Tuesday, May 5, 2009, Investor Guidance on Business Plans
. Hope to see you there.

Twitter: @ScratchMM

Mobile Shakings in New England: (an April) week in review

This week was packed with mobile and start-up events and meet-ups. I attended Momo Boston’s event
- great panel from uLocate
, Google
(Rich Miner, who is now heading up their new start-up investment fund), SkyHook
, Enpocket
(Now Nokia Advertising),and Apperian

Ton of good discussions and data – here are some highlights:
• There are 25,000 iPhone apps on the iTunes stores (and counting). Google’s marketplace is nascent in comparison with 3,000 apps. The iPhone is now in over 80 countries – impressive! Apple launched a new web site counting the number of actual downloads from its store
- downloads are very, very close to a billion! (Here’s the NYT blogpost
where I found the link - - thanks, Jenna Wortham)
• As opposed to the iTunes’s process, Google does not vet apps uploaded to its store – it is counting on crowd ratings. This has got to be dangerous – there are a not of hackers who would love that challenge, I bet.
• Most of the app innovation is coming from North America, even though one new store provider, Nokia Ovi
, is someone to watch – Nokia is the largest phone manufacturer in the world
• Key question asked was: how does an app get noticed? Or how does an app become a top 25/50/100 in the iTunes store? Evidently the jury is still out on this one but it seems that consumers in developing markets may be the right answer for a lot of brands.
• Another question: How do big brands deal with fragmentation? Apperian (full disclosure: I am working with them now) says big brands get their butts kicked by small developers – the Lose it app is very popular, so where is Weight Watchers? Very good point – inaction, big brands, may not be the smart reaction – by the time Gillette is ready we may be past shaving… That is all well – but the reality is that the iPhone and all the rest of the app stores are still a gamer utility. Well, at least until someone shakes the ground.
• Yet another question (I know it seems more questions were asked than answered – but then think early Internet days – it is refreshing we don’t hear some many grand predictions these days): What about the Enterprise? Android can become a work-flow tool, databases are moving into the cloud, computing is advancing, empowering out-of-office experiences, so it’ll happen. But unfortunately there are no good cross-platform tools t=yet.
• Note on SkyHook, which is a fascinating company providing location enablement – they made a deal with Apple to offer their technology to iPhone developers for free – hence we are seeing over 1,500 location-aware apps in the iTunes store. Besides GPS signals they use wi-fi to secure location – it turns out SkyHook has 500 reps mapping out wi-fi (much like Google's approach).

Next, must-attend Momo Boston event: April 27, 2009, Fairmont Copley Plaza, at 5:30 with featured speaker Governor Deval Patrick. A diverse set of mobile companies - Apperian, eInk, Geocade, Locale, Mobile Ed, Olin College, TripChill, Viximo, Valtus Mobile, will deliver rapid-fire, 5 min. presentations on their business models, apps, and products. Registration starts at 5:30 – click here to register

Another great event, the Xconomy Xconomy Forum: The Future of Mobile Innovation in New England
was sold out – a bunch of tweeted throughout the event – use #xconmobile to read about it.


Monday, April 6, 2009

iPhone/ SmartPhone Apps: Data, Market Successes, What’s Next

You won’t be surprised if I told you that there are no established authorities on the subject (yet). There are no clear do's and don’ts. I came across an interesting industry report The Apps Store is Born: Smartphones Enable New Marketing and Advertising Opportunities Worldwide
by David Chamberlain from In Stat
. It goes for $2,495 unfortunately, but fortunately there are a few articles quoting stats from it.

Smartphone App Use Set to Quadruple
by Michelle Megna is one of them. Chamberlain is projecting the number of devices supporting mobile applications to hit over 140 million by 2013. Even more intriguing is that mobile app-centric smartphones – such as the iPhone and Android-based handsets, will reach more than 30% of the global smartphone market. No wonder some established brands are entering the smart phone app markets will great apps. Take the Virtual Zippo Lighter
, which got over 3 million iPhone downloads
since last October. The app was developed by Moderati
. According to TMC Net
, most apps have a shelf life of thirty days in the Top 40, so Zippo’s top 40 position for the last five months make it really impressive. Why is the app so popular? It seems because it captures the “Zippo Encore Moment” and lets concert-goers customize its design. How did it get so popular? Well, this is a trickier question – my guess is, mostly word of month. It is easy to find the app in the app store, so it is easy to spread. If you don’t have a brand like Zippo, try embedding links to Facebook, Twitter, LinkedIn, so people can easily promote your app. This is precisely what Smule

Zippo also did quite a bit of publicizing the app – they had a strong PR campaign, hitting legit app review outlets such as CNET, TMCNet, ZDNet, TechRepublic, and a lot of bloggers. Then Adweek
picked it up. (According to AdWeek, most brand applications failed on Facebook because brands need to compete with “armies of scrappy developers building apps for nearly every conceivable need”. Coca-Cola, for example, is competing with a dozen apps, all spin-offs of the spin the bottle game Coke chose for its own app in January.)

Part of the problem is that most app are not that useful - according to Pinch Media, an iPhone analytics company, less than 5 percent of downloaded iPhone applications are kept longer than a month. You can’t market a flash in the pan – and if you tried, you would only get a flash in the pan adoption results.

I also connected with Mike Alvarez from Avantar
- they have two popular apps - Showtime
and Yellow Pages
, which according to Mike have jointly got hundreds of thousands of downloads. Mike says a few techniques have helped him and his team promote the apps - banner swaps with other iPhone developers, reviews by legit iPhone review sites such as AppReview.com
, AppCraver.com
and TopTenReviews.com
, as well as posting a press release for under $50 to PRMac
. Check this list out as well -
9 Places To Publicize Your iPhone App

(thanks for the tip to Kevin from ShopWatchBuy.com

What’s next?
1. A lot more apps and a lot more competition – from scrappy developers to established brands, vying for our attention.
2. A lot more bloggers and media reviewing apps – and perhaps a new independent apps monitoring body that will help establish and regulate some meaningful measurement standards.
3. A lot more analytics – apps will come in with built-in analytics – it is a way to measure usefulness, adoption, snatches with the apps, and ultimately ROI.
4. A lot more mobile advertising – which of course will make the effectiveness or the usefulness factor of app go down.
5. More money behind marketing apps – no longer just the meeting ground for scrappy developers, apps and app stores will be serviced by a growing ecosystem – of brands, marketers, digital agencies, PR agencies, social media mavens, development shops, consulting companies. Yup, it will be more expensive to be successful, the barriers would be higher – except for the occasional brilliant app that will defy all laws.

Have more iPhone/smart phone marketing tips or thoughts? Leave me a comment or reach me on Twitter @sallyswimsalot


Wednesday, April 1, 2009

Zip Car – wheels when you want them: fascinating marketing success still in the making

If you want to know how Zipcar
became a brand and a business, you have to read NYT’s article - Share my Ride
by Mike Levine (Btw, it really irks me that you have to sign up for the Times before you can read an article – the sign-up process is just too sales/add-driven and it takes away from the reputation of the paper.) It follows the truly fascinating story of building a business from the ground up, with the trade-offs, challenges, difficulties, stamina, ups and downs all start-ups go through in the process of becoming a business, so rarely seen by us innocent outside observers.

8 Things I love about Zipcar:
1. The idea was solid – it was done in Europe before, so it could work in the US. It just needed time – Zipcar started in year 1999. According to official stats, today, in year 2009, the company has 300,000 customers and is still not profitable overall. The company has raised over $40 million in funds and has been brilliant in its branding and marketing execution.

2. Zipcar is not in the car-sharing business, it is in the freedom business. Brilliant! Zipcar is not a utility, it is a lifestyle, a personal statement. All strong, meaningful brands become symbols for who we are and how people think of us.

3. Zipcar has a powerful message - Zipcar doesn’t tell people not to drive - it urges them not to own. What’s more, Zipcar is on its way to redefining the meaning of car ownership (thanks in huge part to Zipcar’s visionary CEO Scott Griffith)– car sharing is “clean, crisp, urbane, postmodern; owning is dull, selfish, timid, backward”. Zipcar is creating a dissonance in our minds and offers an alternative – touched by the Zipcar message, you can’t help but think that if not today, then one day you will be a Zipcar member.

4. Zipcar’s marketing approach is fascinating for two reasons – Zipcar understands that brands and experiences are built over time - long time, folks (Twitter is 3 years old and is still not used by 95% of the internet population). And that it takes high touch. Zipcar has been 9 years in the making and has not made it big yet – it does not have a following in the millions (yet). Although it has been a media darling since it started, Zipcar has fought an uphill battle, city by city, neighborhood by neighborhood to become the new cool.

5. Zipcar cares about its members and every touchpoint of their experience with the brand. It started with the founder Robin Chase (who was forced out of the company after 3 years of running it) who threw potluck parties, mixers, and even a swim at Walden Pond for its members. Zipcar membership is becoming almost cultist – Zipsters are cool, hip, educated, smart consumers, one of the most powerful recruiting vehicles for the company.

6. Zipcar is a local brand marketer – they focus on local businesses, events, feet-on-the-street promotions, which they call hyper-local marketing. Market by market. Their marketing techniques include curbside demonstrations of Zipcar’s technology, Zipcar ads in bus shelters and free membership for merchants who prominently displayed Zipcar pamphlets. They work with universities and local charities too to get their message out and gain better distribution and scale.

7. Zipcar partnered with Starbucks for a social experiment called the "Low Car Diet" where the Zipcar team asked consumers to try out a car-free lifestyle. And it worked - 58% of people who participated said they would not go back to their cars, citing feeling healthier, and enjoying walking and biking more, according to an interview with ZipCar’s new VP of Marketing Victoria Godfrey
for AdAge. To be successful in building a long-term business, you have to connect with people on an emotional level. Otherwise you are bound to be a commodity. One idea or one promotion does not cut it either – the Low Car Diet now is a theme for the company, that has legs.

8. It is all about access: According to Victoria, Zipcar is at the “right time, with a number of global trends setting the table: increasing urbanization, increasing use of transit, ... and an age quickly becoming focused on access vs. ownership”. Love the access vs. ownership idea – rather than buying books, we can now access them via the Amazon Kindle or our iPhone, rather than buying maps, we call our Google Maps to get directions when we need them. Ownership is so passé, access is it, folks.

Yours truly in scratching on brilliant marketing ideas,

Twitter Marketing Tips and Thoughts

Came across Don Dodge's post on The Next Big Thing, which in this case happens to be on Twitter Tips and Tricks from Guy Kawasaki
. Much like Don I agree with some of the tips, and then disagree with others.

I do think that we, the small start-ups, should forget about the A-Listers like TechCrunch
and GigaOm
- we should feel lucky that we can follow them. I kind of agree that Twitter is a numbers game - but I tend to think that it is a quality game first. It takes a while for folks and businesses to find their Twitter voice - so as we are exploring, it is more about establishing who we are and the kinds of things we want to say rather then thinking about building a large Twitter following.

This is why I disagree that we should follow everyone who follows us - it just does not make sense - I only have time to read some of the tweets, and try my best to read @replies to me, or direct messages (DM). Even there I am falling short (and now I think I am starting to develop this anxiety around what I might be missing...especially since I came across a post from @ScottKisrner
about another breakfast he is putting together for consumer-tech-oriented entrepreneurs in the Boston area, on April 17th. I jumped on that one but now I worry more and more about what else is out there that I should know about.)

Another Kawasaki tip that rubbed me the wrong way - be an unabashed copycat on Twitter. See what popular folks talk about and start tweeting about these things too. What if people don't like what we have to say? Well, UFM then. Unfollow me. Now, that goes against the grain of effective communications - the more subjects you talk about, the less effective you are. I personally skim Guy's posts these days and am considering UFing him - he adds no value for me - I don't know what he talks about half of the time. And I am pretty sure it is not him tweeting for the most part anyway. So my bet is - he will lose his followers soon - a lot of them. You have to be real on Twitter or sooner or later people will stop caring/following.

Your best bet on Twitter is to find who you are and what you want to say and stick with it - and pls don't say anything if you have nothing to say. Resist the temptation to tweet for twitter sake. It is a lot harder to become a favorite when you have only a 140 characters to say it with. Use those characters wisely. And have fun while at it - like the Guardian did today
(thanks @TimOReily
for the link!)- love it!
Twitter: @sallyswimsalot