Archive for 'Enterprise'
Companies must go where their customers are
Companies are using social media to “be where their customers are.” In this panel, sponsored by Omobono and East of England International, up in Cambridge on Friday, Susan Bratton talks about this important change of orientation which more and more companies are putting into practice.
Earlier, in London, some of us had similar conversations with companies who are implementing social media strategies to be in closer touch with their customers. One of the companies I spoke with, in a conversation held under Chatham House Rule (meaning “not for attribution” or “off the record” in US press terminology), the head of customer support told me he had opened a Twitter account, reviews around 500 tweets a day, and helps between 10 and 50 dissatisfied customers resolve problems they’d been having with his company. This apparently takes him only a small amount of time (an hour or two, from what he said) and generates a huge amount of goodwill at very low cost, for his company.
I’ve been advising my clients for at least the past year to not worry about “attracting eyeballs to their web site” but instead to focus on making there presence felt “wherever the customer lives online.” In the case of my customers this means setting up Facebook fan pages and Twitter accounts, and then using those to engage in genuine conversations with customers – not one-way marketing-speak.
Oops, almost forgot – listen to what Susan has to say about all of this!
She calls it Social Influence Marketing and it has three core components: 1) Social Listening; 2) Participation; 3) “Appvertising” (Give-to-get).
Social Media forces immediacy of customer support
A theme that came up again and again during our London/Cambridge Traveling Geeks tour was that social media, and especially those that provide “immediate” access to company representatives (such as Twitter), are really changing not only how fast a company can respond to customer questions and problems, but are relocating (dislocating?) where the control of the customer relationship resides within many companies. Twitter provides 24/7 access to company representatives (if they’re actually online), and it shifts the decision point or the point at which the company takes responsibility for a problem, outward from the PR department and “C-level” executives (CEO etc.) to the actual front lines where the company’s employees are talking with the customers! Here’s what Robert Scoble said about this in a roundtable held in Cambridge on Friday. The sponsor of this session, Omobono, also has put up a page about the Traveling Geeks visit.
London’s Accel Partners’ StartUps Share Why They’re Great
I met with a number of Accel Partners portfolio companies in London recently; the industries ranged from enterprise content management to virtual games for kids.
Alfresco’s CEO John Powell’s core competency for the past 20 years has been working with enterprise content management systems that help you power companies. “Open source is a model we want to use,” he says, “we want to make money, but we also want to make a difference.”
It’s not all viral for them. Powell says they do invest a lot in brand awareness and marketing and although they launched the company in the U.K. in 2007, they are currently running businesses in five European markets.
The one woman CEO in the room was Wee World’s Celia Francis, whose company offers a virtual world for teens with a massive mainstream appeal.
More and more educators and researchers are seeing that social play is important throughout a person’s life, particularly through adolescent teen years, when teenagers are trying to learn to navigate their way in the real world.
Their previous service Wee Me has 29.5 million registered users, so based on that stat, there’s still room for the virtual world to thrive. For their newer service Wee World, which is extremely visual, they currently get two million uniques, 90% are return visitors and 85% of those are from the U.S. Why? “Because it’s important to win in the U.S. market first,” Francis says.
They’re also trying to expand their reach in the U.K. and the rest of Europe. 90% of the traffic is organic through word-of-mouth and the other 10% is from people who are making a Wee Me on partner sites.
She describes the service by using one example of life in Wee World, “you can get yourself a pet dog, and every time someone pets it, it evolves and grows. Teens can also make up their own games on the site.”
Apparently 70% of their audience changes things in Wee World every day. “We’ve added trophies, quests and ways you can accomplish things,” she adds, which adds achievement layers on top. It’s a combination of socialization and expression.
The two companies I was most intrigued by and had a chance to spend more time asking questions was Wonga and Mind Candy, most known for their brand Moshi Monsters.
Wonga CEO Errol Damelin is originally from South Africa, so we had a lot to talk about.
Wonga provides short term loans ranging anywhere between five days and a month. Says Damelin, “we want you to repay your loan quickly and, unlike many traditional sources of credit, we’re not about stringing repayments out for as long as possible. Our service is designed to put you in control of your cash flow, for those times when an unexpected expense catches you by surprise.”
Social marketing is limiting because people don’t want to tout that they need money. That said, there’s clearly a market for this service and not just in the U.K., which is where their focus is today. They’ve been live for a year and are focusing their efforts in the early days, on building trust, which is based on three core principles.
Damelin adds, “we get a significant amount of our traffic through word-of-mouth, which comes from us over delivering, being consistent and treating people the way people want to be treated. At the end of the process, did we deliver and would you use us again?”
Unlike most lenders, they enable you to choose exactly how much money you want to borrow – down to the last pound – and for exactly how many days. Wonga doesn’t force you to borrow a fixed sum you might not need, nor do you accrue interest for longer than necessary.
The amount you apply for and the length of the loan naturally affect the cost of repayment too, so you can make adjustments until you’re happy with all elements of your application.
One key difference with Wonga vis a vis a credit card or overdraft: you must commit to settling your Wonga loan quickly. They actually make their money when you repay them on time, not by continually extending a growing line of credit. They don’t endlessly roll their balance from month-to-month and no further funds are made available until your existing loan is repaid.
Wonga is not a typical internet lender. Because they have a sophisticated credit reference system, all application and payment is entirely online. Their technology allows them to assess applications in seconds and select people whom they believe are able to repay them.
He adds with a smile, “the lending business has been calcified and static for years, but over the past couple of years, it has liquified, which has created a lot of new opportunities for us.”
I also shot some video of Damelin on site in London, so be sure to listen to his pitch in his words.
At Mind Candy, the parent to Moshi Monsters, they make multimedia games. “Playing alone is fun, playing you’re your friends is even more fun but playing with people from around the world is the ultimate,” said CEO Michael Acton Smith.
“The coming boom of the next two years are games for everyone else, like games around subjects that are more mainstream, such as dancing, fashion, sports, and virtual pets,” he says.
Moshi Monsters is a little bit like Facebook but for kids, but you can also create your own custom monster. Apparently 7-11 year olds is the prime audience for virtual pets.
The heart of the game is called stealth education. There’s a puzzle palace where kids can play and compare their scores with each other.
“We’re trying to adopt adult behaviors and make them safe and usable for the kids space,” said Smith.
There’s also a Friend tree and every time you add a friend, your tree grows. Kids can leave post-it notes on their friend’s walls and create their own puzzles and then rate each other. They’ll soon be launching a news feed, so kids can get a personalized view of what their friends are up to.
They launched a little over a year ago, and within five months, the site became cash flow positive. They currently have over 4 million registered users, a 1 million of those users signed on in the last month alone.
Viral? The early traffic was but not the big spike in the past couple of months. They just doing some TV advertising and it’s paying off.
A third of their traffic comes from the U.K., a third from the U.S. and the remaining third is from the rest of the world. 70% of their audience are girls and revenues are growing at 75% month over month.
I shot video of Smith at Accel Partners, where he talks not just about their growing in popularity service but their experimentation with marketing in both traditional and non-traditional outlets so be sure to tune in.
Huddle and Spotify Talk About Their Services
Huddle’s Andy McLoughlin and Alastair Mitchell and Spotify’s Shakil Khan talk about their value-adds for the consumer. We chatted in central London earlier this month. Tune in below for their stories in their own “voice.”
Getting Ahead with the WOW Factor
From this week’s London Evening Standard on branding and getting ahead with the WOW factor. As Amazon’s Jeff Bezos once said: “Your brand is what people say about you when you’re not in the room.”
Why Zynga Is Worried about Playfish
[Cross-posted from TechCrunch]
When I wrote my BusinessWeek column on Zynga a while back, every venture capitalist in the Valley told me that Playdom was the company’s biggest competitor.
After all, it competes game-to-game, with similar mob-style and
poker games, and was said to be doing the same revenues as Zynga with
much higher profitability. (As my column pointed out, Zynga’s revenues
are more like double Playdom’s—and since I’ve heard the discrepancy is
even greater.)
As you’d expect Zynga’s CEO Mark Pincus pooh-poohed Playdom as any
sort of threat. But tellingly, he said the company he was worried about
was UK-based Playfish. So, while I was across the pond, I decided to
see what the fuss was about and sat down with Playfish’s founder and
CEO Kristian Segerstrale. I came away convinced this was one of the
hottest companies to watch in the UK. Here are five reasons why.
1. Not “The UK Zynga.” Playfish is very much running its own
race in this market, and this may be a case where distance from the
Valley is actually healthy. It doesn’t try to compete on specific games
with Playdom, SGN, and Zynga. For instance, it doesn’t have a mob game,
the most popular genre right now, and it doesn’t have a poker game,
Zynga’s top earner. “That’s such short term thinking,” Segerstrale
said. “Something is wrong if your route to success is copying
competitors’ games.”
2. Platform Development Doesn’t Have to Mean Half-Ass Development.
Playfish is not about building a game in a week or so and throwing it
up on Facebook. Playfish spends six months to a year designing a game,
and they’ve only produced seven of them. While everyone else talks up
how quickly and cheaply you can build a game on social networks,
Playfish still employs the same artistic discipline of a console game
with a Wii-like look and feel. The plus with platforms like Facebook
and the iPhone isn’t speed to market for Playfish, it’s easier
distribution and greater social engagement.
3. Traction. The painstaking design process appears to be a
hit. Every one of Playfish’s games has been a top ten hit on Facebook.
Across all platforms, those seven games have yielded 100 million
installs and 30 million monthly uniques, says Segerstrale. Playfish
pays “practically nothing” for customer acquisition and makes money
through virtual goods, ads and premium versions of games.
Playfish is profitable and hasn’t spent a dime of its recent $17
million funding round. That’s gotta be some top line given Playfish has
200 employees across several offices. In fact, TechCrunch Europe’s Mike
Butcher speculated that
Playfish could be the $1 million-dollar-a-month Facebook app maker,
back in September 2008. It certainly puts the company in an enviable
position given the paucity of venture funds in the UK.
4. Proximity to the Valley Insiders via Investors. While
Playfish enjoys distance from the one-ups-man-ship or developer
poaching of SGN, Playdom and Zynga, it’s connected into the Valley
where it counts. One of its main investors is Accel—also one of the
main backers of Facebook. Yes, that matters. (See Sequoia
Capital-backed Google’s purchase of Sequoia Capital-backed YouTube.)
5. Segerstrale Knows Games. This is the fuzziest one, but
also probably the most important. As a CEO, Segerstrale comes to this
industry from a different point of view than Pincus. Pincus has said he
was never really much of a gamer—Segerstrale on the other hand has
loved games since he was three years old playing Pong with his older
brother. He always got a visceral rush from playing, especially with
other people. So he’s spent much of his career working towards two
goals: Decoding what makes a game “fun” and deconstructing the concept
of a “gamer” so games are just something everyone plays.
His first attempt was at mobile, thinking that with phones in every
pocket, everyone would essentially have a game console. Indeed, the
company he cofounded, Glu Mobile, went on to a successful IPO. But
gaming was still a niche activity on phones. There were too many
barriers set up by the telcos and it wasn’t as easy for people to find
and download games. Facebook turned out to be a much greater platform
for this kind of democratization of gaming because users could market
games to one another.
Segerstrale’s macro theory is that we’re in the first shift of a
move from physical games and goods to digital ones, and from games as a
product to games as a service. It’s a theory that seems right-on to me.
For one thing, we already saw it with the transition from enterprise
software to software as a service. For another, sales of console games
are down 20% year-over-year according to NPD, while comScore says
social gaming is up 20% year-over-year. It’s nice to see a CEO who can
articulate not only a product vision, but a clear industry vision.
All the positives above aside, I’m still not convinced that
Segerstrale will succeed in his mission to democratize games. I still
mainly use Facebook as a way to connect with friends, not to build
virtual restaurants and I don’t necessarily see that changing. In fact,
Facebook has so de-emphasized apps in its new all-feed iteration, I
spent nearly an hour trying to find a listing of games, before someone
finally told me it was on the throw-away bottom bar of the profile
page. And by emphasizing the social stickiness of a game, there’s a
chicken-and-egg risk that the games are boring for people who don’t
have enough friends already playing.
But these are execution risks and every promising startup has them.
When it comes to business model, financing, vision and product,
Playfish is certainly a formidable competitor to Zynga. With hundreds
of millions in real dollars already swarming around social gaming, this
will be fun space to watch.
UK Entrepreneurs: Get Your Funding While You Still Can
[Cross-posted from TechCrunch]
You think you have it bad,
Mr.-Silicon-Valley-entrepreneur-trolling-Sand-Hilll-Road-for-cash? Try
life on the other side of the pond.
Out of 39 firms that were active investors in British start-ups over
the last five years, only thirteen venture firms have £5 million or
more left in their coffers to invest, according to NESTA, the UK agency that advocates for start-ups and also sponsored the recent Traveling Geeks blogger tour.
That’s right: All but thirteen firms in the United Kingdom are
either completely tapped out or have committed the rest of their funds
for follow-on investments in existing portfolio companies. In total,
NESTA estimates there’s about £400 million left that’s uncommitted
among the thirteen, with only half of that available for brand-new
series A deals. To put that into perspective, there’s roughly the same
amount of money in the fund Marc Andreessen just closed than there is for new companies in the entire United Kingdom right now.
This is coinciding with a precipitous drop in UK firms closing on
new funds thanks to the global credit crunch. In 2008, only seven firms
closed new funds, and NESTA expects fundraising to be even weaker in
2009.
As most people know, I’m a pretty big advocate of the idea that many
of the next great high-growth companies will be founded outside of the
U.S., but these stats starkly demonstrate a undeniable advantage of
being Valley-based. Even when fundraising slows and VCs save bigger
reserves than usual for current investments, there are still billions
sloshing around to fund new deals. Sure, it’s hard during times like
these even in the Valley, but raising venture capital should be hard.
As with most research reports on the venture business, it’s the
trend line that’s important to note here. It’s probable that NESTA
isn’t counting a firm here or there. But it can’t be too far off.
Indeed, the stat explains a lot of the anecdotal evidence that hit me
in the face as soon as I arrived in London two weeks ago. Many of the
entrepreneurs who’d pitched me on my last visit to London in November
have already shuttered their companies and were unsure of what to do
next. I have exactly one friend in Silicon Valley who has been forced
to that point.
Even the good UK early stage names are struggling to close deals. It took AlertMe—a hot energy home monitoring company that won The TechCrunch Europa
for best clean tech company last week—a whopping nine months to raise
money almost landing the company in bankruptcy. (Index Ventures and
others finally snapped up the deal a few months ago.) “I don’t want to go through that again,” the very polite and British CEO Pilgrim Beart demurred.
It’s that kind of bleak desperation that lead the infamous Paul Carr to pronounce the UK Internet scene dead….just before his own column in the Guardian became its own victim of the economy a few days later. (See Mr. Butcher's TechCrunchEurope rebuttal here.)
Indeed “the scene” may be dead, but there’s an upside here. The
companies that are still around have a much greater emphasis than
Valley companies on making money. The Traveling Geek contingent went to
Accel’s London office to meet with a handful of start-ups, and each one
emphasized revenue and profits in their five-minute elevator pitches.
One that caught me by surprise was Michael Smith’s Moshi Monsters,
a social network/ virtual game for kids. Cute idea, but sounds like it
should be road kill in this environment, right? Nope. Its revenues are
growing 35% month-over-month, it has 85% gross margins, and just five
months after launching the site is cash flow positive. Nicely done,
gents. (BTW, Smith isn’t all business. His house was the setting of those famous Scoble pictures…)
Indeed, there’s always something healthy about startups having to
work within constraints. There will be fewer of them, but it’s possible
that the companies that make it in this environment could well make up
one of the most promising crops of UK companies we’ve ever seen. After
all, Skype was laughed out of VCs’ offices when it started in the wake
of the dot com bust.
In the coming days, I’ll be writing several more posts about the London companies that impressed me the most. Stay tuned.
UK Diary: Friday – Cambridge Startups
http://www.youtube.com/watch?v=uo_aUaJlAFA
Friday and the Traveling Geeks are in Cambridge, the innovation capital of Europe.
After presentations by Cambridge university representatives and also from government agencies helping startups, the Traveling Geeks take part in a panel and also hear presentations from local startups.
UK Diary: Friday – Cambridge Consultants, Nokia And Microsoft Research Labs
http://www.youtube.com/watch?v=iT3hro-BsQc
Friday afternoon the Traveling Geeks visit Cambridge Consultants and visit the William Gates III building for meetings with researchers from Nokia Labs and Microsoft Research Labs (MRL).
Cambridge Consultants has helped bring to market products such as:
– Virtually waterless washing machine
Low cost cellular base stations.
More here.
The Microsoft Research Labs are part of the academic community at Cambridge university and the work is open and peer-reviewed. In the video our guide is Cambridge university lecturer and successful entrepreneur Jack Lang, also Ken Wood, deputy director of MRL, Tim Regan, Research SDE at MRL, and presentations from their colleagues. The video also shows some of Microsoft’s research projects.
UK Diary: Friday – Cambridge Startups
http://www.youtube.com/watch?v=uo_aUaJlAFA
Friday and the Traveling Geeks are in Cambridge, the innovation capital of Europe.
After presentations by Cambridge university representatives and also from government agencies helping startups, the Traveling Geeks take part in a panel and also hear presentations from local startups:
– Alert Me
– Taptu
