I am attending my first AdTech in San Francisco. Unlike Web 2.0 expo this year, the economy was not a dampening effect. The conference was packed, long lines, registration took awhile to get through. But the mood stayed upbeat and focused on success -- what worked, what was learned from new innovation and social media advertising. The star of the show? Seems to be the recent campaign, inauguration and President Barack Obama.
One of the themes to quickly emerge was the need for collective solutions. In the Keynote panel, Eric Feng from Hulu recalled when people were excited about video overlay technology and yet the best performing ads on Hulu continue to be the traditional 30 second ad spots. Feng notes "where innovation really happens is when marketers sit down with everyone...[to create an emotional connection]." All the panelists agreed that success required publishers + marketers + advertisers + platform/technology to be aligned tightly in order for an authentic and resonating story to be told and distributed.
Online media campaigns should not stand alone. To be successul, the campaign has to be conducted in an integrated manner. Joel Rubinson of the Advertising Research Foundation declared President Obama to be the "poster-child" for integrated media. Joel cites Obama's early stage and TV appearance to keynote the democratic national convention in 2004 gave him the credibility needed to build the grassroots support using social media. Without this credibility, it would have been more difficult. And the savvy use of the internet, MyBarackObama.com, the use of all media whether TV, video, social media in an integrated fashion created the necessary synergies to personalize the candidate and win him the Whitehouse.
One of the most entertaining sessions was the case study focused session on Social Media + UGC. Again, re-inforced was the power of social media unleashed to elect the new President. The integrated marketing involved traditional media CNN and new media YouTube and Facebook in hugely successful partnerships around the campaign, election and inauguration. The numbers are staggering. Facebook and CNN achieved 1.3M concurrent livestreams on election day as people shared the election experience.
The overall take-away: with the right mix of media, a genuine message and a cause close to people's hearts, the results can be astounding. Social media can be a powerful tool but the art is still that of making an emotional connection and telling a story. Below is a video clip of a Starbucks commercial that Andy Mitchell, VP of Interactive Marketing for CNN Worldwide shared during the session that achieves just that connection with simple imagery, a catchy-tune and a timely message.
I attended the Strategy Series from Dealmaker Media this past Tuesday in part (I will admit) because of the provocative title for the event: “If you Need Funding, You’re F%#$*d…Or Are You?”. I’m human and it sounded like it might be a good time to be had by all. Although the actual discussion was much more civilized than what I was hoping for, the VC panelists didn’t disappoint. Vineet Buch from BlueRun Ventures; Mitchell Kertzman from Hummer-Winblad; Sergio Monsalve from Norwest and Eric Ver Ploeg from VantagePoint were relaxed and candid and we got extra input from Christine Herron from First Round who was in attendance as well. Given the doom and gloom talk on the economy, I wanted to get a sense from investors where their minds were at and whether deals were happening. The net of the discussion was YES, VCs are still closing deals and looking at new deals. However, they’re way more picky, they’re focusing on external milestones as indicators and capital efficiency was top priority. CEOs looking for venture money should be prepared to make the money last for at least a 2 year runway and follow-on rounds don’t look likely right now. So the quick answer to the provocative question is if you need funding, you’re not totally up the creek without a paddle but it’s not going to be easy. If you need follow-on money, then you may be F%#$*d. You’ll need to be resourceful, stretch the dollar more than even startups already have to (no more bottled water and a lot of canned Spam and top Ramen noodle) and have proof of real outside traction -- as in key partnerships, key pilots, key customers, and realistic numbers and projections. On the positive side, everyone else is in the same boat so you won’t need expensive, splashy marketing dollars. You will need to learn to be even more guerilla in your tactics if you’re not already to ride things out and keep your business’s lights on. Now, what was fun that came up over and over again in the panel discussion were the words Love & Lust and Greed & Fear. All of the VCs agreed that funding a company was a relationship with the entrepreneur. The conversation kept coming back to “falling in love” versus “falling in lust”. The state of the economy now highlights even sharper the tightrope walk between these two poles and between Greed & Fear, the risk appetite of each investor and how far out on the line they are willing to walk for the right deal – the balance of winning a huge jackpot with losing your shirt. The actual funding event was equated to marriage and statistically the average VC relationship with a startup apparently lasts longer than the average California marriage. So VCs are now even moreso raising the bar and waiting for true love rather than a good roll in the hay. They will do all reference checks and listen to their partners on whether a deal is the right one or not. And on the reverse side, the VCs encouraged entrepreneurs to approach the relationship the same way. Check your VCs background, how they behaved in the past on deals and whether your interaction is infatuation or something real. Why I found this interesting was that a friend of mine recently told me that divorce lawyers and marriage counselors were seeing a booming business right now. Financial problems are the single biggest stressors in a marriage and couples caught with financial woes are splitting. So the marriage of money and innovation is no different in this case. A hard environment highlights in relief the scary probability of failure in funding early stage companies.The need for rational, practical, experienced management becomes more apparent. The business plan is no longer just an item on the checklist, the 5 year pro-forma budget needs to be grounded in reality. Likely exit is not huge IPO or a crazy valuation and acquisition. Marriage is taking out the trash, doing the dishes, saving money and planning for kids and retirement the hard way. Last years VC Outlook 2008 focused on fundamentals and the message is not really different this year. Focus on the fundamentals and make the money last for at least 2 years. No one knows where this economy is really going right now. If it lasts for 10 years, we’re all in a lot of trouble. If it lasts for 2-3 years, the folks who made their money work for them will still be around to take advantage of the opportunities. I was going to come up with a cute title for this blog but decided that there was no reason. The facts stand for themselves. The fact is that Loopt, a great company with one of the smartest CEOs I've ever met (Sam Altman who is only 24 years old) was up on stage at Steve Job's Apple World-Wide Developers' Conference last week presenting the latest version of the Loopt mobile social networkng application on the new 3G enabled iPhone. The fact is that the default mapping the application used was Microsoft's Virtual Earth. And the best fact is that this great social networking application will be available for free on the iPhone so using Loopt, folks "never have to eat lunch alone again..." as Sam promises in his speech. Did I mention that Loopt is a Microsoft Startup Accelerator Company? My colleague covered them in a previous blog that you can read here. I don't want to sound like a Loopt groupie but check out the video of Sam on stage at WWDC. The Google I/O two-day conference started Wednesay May 28th at the Moscone Center in San Francisco (I was going to say today but realized it's 2AM PST now). This developer focused conference was first branded Google Developer Day last year in San Jose but has since grown in scale and coverage. It was a packed house with over 2500 developers crowding into Moscone West. There was a brief hiccup with registration which caused everyone to go up to the keynote without their badge but by 2PM, everyone was badged and good to go. Vic Gundotra, VP of Engineering at Google delivered the keynote address around the theme of "Client, Connectivity and the Cloud". The sum of the message was that Google was making the cloud more accessible, making connectivity pervasive and making the client more powerful. To illustrate the first point, Vik had Kevin Gibbs, Google Tech Lead for AppEngine come up to talk about their new cloud services offering that they unveiled earlier at Google Campfire One. Additionally, Kevin had some pricing information available on what Google will charge for the service. To speak to cloud accessibility, Steve Horowitz from the Android team demo'd a mobile device running Android. This presentation was definitely the crowd-pleaser with everyone loving the compass-enabled Google Streetview application. Then Mark Lucovsky showed the Google Data APIs to spice up a simple celebrity fan-site. I don't know if I should make this observation or not but of the 4 main presenters at the keynote session, 3 of them were at Microsoft prior to Google (Vic, Steve and Mark). The conference was not a stage for any large announcements but more a series of smaller incremental announcements for Gears, GWT (Google Web Toolkit), Google Earth APIs, etc. However, Google I/O is notable in that Google, in a more significant and deliberate way, is reaching out to the developer community, a community that Microsoft has long focused on. What does the I/O stand for in Google I/O? Vic in an earlier interview with CNET said it means "Innovation in the Open." I thought it was Input/Output as in getting developer Input and having Google's latest announcements as Output but maybe that was too obvious... Jajah, a Microsoft Startup Accelerator company has been super busy lately with some really cool deals that place it where the users are. First off, last month, Jajah announced that it will provide voice services for Yahoo Messenger users (a total of 97million people). This marks Jajah's first enterprise client and also marks Yahoo's determination to move into Skype's VoIP-space which is great news for Yahoo users and all users (competition is always welcome). Jajah's subscriber base has jumped to over 10 million in just 2 years since starting in 2006. With the Yahoo deal, it should continue to grow at a pretty steep clip. My erstwhile colleague, Nicolas Kardas, wrote about the company a while back (check out his original blog) when they had 2 million subscribers and were winning multiple industry and startup awards. It looks like they haven't slowed down though Skype's registered user-base stands currently at around 246 million. The second deal Jajah announced that I thought was neat was their integration with Chumby. Jajah has created a "Jajah Widget" for the Chumby device to allow free PC-to-PC or low-cost calls to mobile and land-lines anywhere in the world. I can have Chumby sit next to my bedside and I can make calls from there. Lastly, Jajah is working with MobileTribe in order to reach Facebook, MySpace and Yahoo users through a mobile phone to place calls and send SMS. Whether instant messaging, hanging out at home or on my mobile phone, I can make hugely discounted or free calls to my friends and family anywhere in the world thanks to the busy team at Jajah. I'm sure they are as busy as ever work on the next level of integrations. Pageflakes, one of the companies I have had a chance to work with in the past year in the Microsoft Startup Accelerator Program, last week finalized its acqusition by LiveUniverse (a private company headed up by Brad Greenspan of MySpace fame). The acquisition was announced in mid-April of this year with financial details of the cash and stock deal with-held. This is exciting times for the team, and I'm happy to see they found a synergistic acquirer that will give them additional firepower to fully develop and distribute their platform. Many of the blogs about the acquisition announcement hinted that the acquisition was not for a large sum and that Pageflakes has not gained as much market traction as its closest competitor, Netvibes. I can't say I know any details, however I do know personally that LiveUniverse was not the only suitor and that the other suitors for the company saw the widget platform as a highly strategic and desirable offering to have. Not to mention several people have asked me about how they can poach the technology team. This underlines for me what is valuable when building a company. The company was attractive to LiveUniverse for not only its technology or market traction but also its team. Dan Cohen, Pageflakes' CEO is a seasoned veteran of startup companies as well as Google and Yahoo. Omar Al-Zabir, Pageflakes' CTO is a programming wunderkind at 24-years-old, Microsoft MVP and author of the O'Reilly book on Building a Web 2.0 Portal with ASP.NET 3.5 and I have met many of the scrappy folks that work with them at the young company pulling late hours to make it all happen. Dan will report directly to Brad Greenspan and Omar will work with Toan Nguyen, the original social networking architect of MySpace. When considering off-shoring a startup company's human resources, you should at least ask yourself if building a great team isn't a saleable asset in and of itself. Also, both Pageflakes and LiveUniverse are based on the Microsoft platform so the integration of technologies made sense. Pageflakes and LiveUniverse started out with a business development/partnership-type relationship and very quickly the LiveUniverse team realized it would be more strategic for them to take Pageflakes directly into the fold.The first integration point will be with LiveVideo and Pageflakes' capabilities will allow the sharing and spread of video content through the 35 LiveUniverse properties as well as the web through "page-casting". Just from that initial focus you can see that LiveUniverse will have greater virality of its content leveraging off of the Pageflakes widget platform and Pageflakes will have greater growth through exposure and marketing to the LiveUniverse sizable audience network. Brad gains a strategic and seasoned executive and entrepreneur in Dan and Toan and Omar will create considerable technology firepower for the combined company. Already with team + technology, Pageflakes + LiveUniverse is greater than two. One of the take-aways from Demo is how far rich interactive applications (commonly abbreviated as RIA) have come. The web today is a much more exciting and accessible place than the HTML webforms of 1999 and some of the following cool companies that presented this morning demonstrate this enabling creative power. CapZles; This company provides an online tool to create and present an asset "filmstrip" and add comments. They have an ad-based revenue model so the tool is free to anyone. It's a nice way to share pictures and video with your friends and family. It looks beautiful and is very easy to create. My mom would love this tool and I think I'll send her a link to a CapZle I created of pictures from her garden. The company says they integrate with FlickR. Cozimo is an online collaboration interface geared toward the design community but super simple it could be used by anybody. Cozimo lets you upload images in PDF and video and then allows you to overlay these files with markups and comments. You can annotate the files in different colors and collaborate with multiple users as you hash over a creative idea or vision. All viewers will see the same area or frame in a design document and can chat real-time. You can zoom in their viewer with full vector graphic support. They have wrapped their viewer so that you can embed with a few lines of code, their application into your website imagery which is very cool. This tool brings the phrase "get on the same page" to life. XtraNormal: This company is really neat, allowing anyone on the web to create a customized 3-D rendered "movie" video clip with just a few clicks. They provide a library of 3D avatars where you can customize your characters by selecting from a library of assets, gestures and appearance. You can choose scenes and add props. It's in private beta currently but I can't wait to wow my friends with xtranormal and flex my movie-making muscles. Their motto, "we're not normal, we're xtranormal..." The defining traits of these companies are impressive visual design, ease-of-use and ease of sharing. With just a few clicks I can impress my friends and family today more than I ever could before. My colleague Lynda just wrote a blog post about using email to check your voicemail, and I thought it was timely to talk about Earth Class Mail, a company we are working with in the Microsoft Startup Accelerator Program. Earth Class lets you check your snail mail the way you would check email. From a consumer perspective, it's a brilliant solution for people who travel, have multiple residences, or get swamped in the deluge of mail that we all get. It lets me stay on top of my correspondence and manage it in digital format. It is also a very green earth-friendly solution as Earth Class will let you indicate which mail items you would like recycled and they take care of it. All of those catalogs, flyers and solicitations can get flagged easily from a web interface and sent to the recycling bin with the click of a button. The pieces of mail that you want opened and scanned into digital format you indicate and you can have it stored. Pieces of mail that you would like to actually hold in your hand (ie family pictures or personal mail) you can get forwarded on to you at your real address. The subscription fee is very modest and the convenience value is great. For the enterprise mailroom, it's a no-brainer. It is secure and cost-efficient. And as telecommuting, virtual office-scenarios and companies increasingly spread their workforce into local markets, having a solution like Earth Class Mail makes perfect sense. There is no training for the workforce as well. They can check their corporate paper mail as they would their email. So there is less stress over an unopened document sitting on your desk that you miss because you had to catch the last plane out. With this service, you can "virtualize" your mailing address, having different addresses given out to different types of people or organizations so you can better manage and prioritize your mail. You can have a local address where you don't necessarily have a brick-and-mortar location. If you move often (as my parents did when I was younger), the act of forwarding your mail is less painful,... you don't have to do it and if you want something forwarded, it's as easy as changing a webform to have your mail redirected. Years ago, I subscribed to a service from Intuit that let me direct certain bills to their Bill Pay service (phone, utility). My bills would get scanned in and I could then manage them from a web interface, get them paid directly and track them. I loved the service and wished I could do that with all of my mail. Now I can! I can track any piece of mail in a digital format with a truly impressive operation. Earth Class Mail has the ability to track every piece of mail that comes into their facility and can tell you exactly where that piece of mail happens to be (on the conveyer belt, being opened by which personnel). Everything is coded and the people handling the mail have security clearance (most are veterans), they work in a clean environment, and each piece of mail is filmed as it is being opened and scanned. It's amazing to see. Your information is safer going to the Earth Class facility than sitting in your driveway mailbox or in a box in your company's mailroom floor. The USPS cannot tell me where my mail is even when I pay to have it tracked. Earth Class mail accomplishes all of these features with a high-scale, high transaction infrastructure built on the latest Microsoft technology. They were recently a featured Microsoft partner at Post Expo 2007 in Barcelona. Additionally, the crack team of entrepreneurs at Earth Class were filmed for the first season of a reality series by the MOJO HD network called Startup Junkies. My team hosted the preview to the show to an audience of investors and entrepreneurs in back-to-back nights in Silicon Valley on January 16th and Redmond on January 17th. The show is a must-see; definitely worth watching for the entertainment value, the beautiful scenery of the Pacific Northwest in high-def and the tumultuous and exciting world of upstarts. Ron Weiner is a class-act and the go-get-em team make you root for them. Currently funded by Ignition Partners and the Keiretsu Forum, Earth Class Mail is definitely a timely idea bringing innovation to the dated postal system. As they say on their website, with Earth Class Mail...You’re now using Postal Mail for the 21st Century! This is a re-cap of DealMaker Media | Strategy Series - VC Outlook for 2008 on December 5, 2007. MODERATOR: Harold DeGraff, Partner, Perkins Coie PANELISTS: Duncan Davidson, Managing Director - VantagePoint Venture Partners
Rob Hayes, Partner - First Round Capital
Jim Long, Partner - Gabriel Venture Partners
Will Price, Managing Director – Hummer Winblad Social networking was discussed in length, but the panel felt money would not go to yet another social network. Instead, Will Price focused on adjacent areas such as analytics (he frequently cited Hummer’s investment in Omniture). He spoke enthusiastically about the rich information mining capabilities promised by the opening of the social graph and the possibilities social networks offer to finally explore these inter-connections between people first discussed 40 years ago when Stanley Milgram did his "Six degrees of Separation" experiments at Harvard in 1967. Will mentioned the study of churn rates for cell phone users and how a friend leaving a network has a direct measurable probability on that of anothers’. Vodaphone and O2 are reaping the benefits of such “social-churn” analytics. Also, mentioned was the ability to identify influencers and trend mavens a la The Tipping Point in order to better target customer segments. There is a wait-and-see mentality on whether Google’s OpenSocial initiative will be the key to opening the social graph for these types of analyses. Duncan tentatively cautioned over-analysis of data in making advertising decisions. There was consensus that online advertising potential still remains untapped. However, the VCs felt companies generating page views were over-valued (they cited RockYou and Flixster). The thought is such businesses will never be able to monetize via ad-revenue effectively due to poor targeting capabilities and lack of control of the appropriateness of the content. The anecdote given: Coca-Cola does not want to advertise against a slideshow of someone killing a cat. Cited was the case this summer of advertisers such as Vodafone, Virgin and Prudential pulling out of Facebook after their ads were displayed against content by the British National Party (Nazi Party in the UK). The emphasis instead was on companies that offer greater interactivity and measure on total time spent instead of page views. A gentleman from Newsgator cited his business as an example of effectively monetizing online advertisement. To sum it up, the panel felt that while a bubble was looming, as evidenced by hyper valuations (that the VCs themselves are driving), they are still focused on investment fundamentals like cash-flow b-e and customer growth that start ups can produce in a consistent and predictable manner. The big news for this week in the Valley is the Microsoft equity stake in Facebook announced yesterday. Everyone's reaction so far has been "cool!" I have to admit. It is pretty cool. This news is exciting but really tickles me for a number of reasons. Firstly, Microsoft rarely takes an equity stake in a company except in strategic areas or special circumstances. Equity investment is the exception and not the rule. I can think only of the IP Venture spin-off companies as examples where equity is in exchange for the use of Microsoft research IP. So exceptions are definitely interesting to study. Secondly, the valuation blew my mind. At $240M for 1.6% of the company, Facebook's valuation is now $15B. This is up from speculation of $3B only last year. That sure is a lot of money. I have to admit that I questioned the huge valuation for Facebook even when people were talking $7-10B. Thirdly, how wrong we all sometimes are! I remember reading a paidcontent.org article about Facebook in June of 2006 after the announcement of the Interpublic deal with them. Interpublic group basically took 0.5% of Facebook in exchange for $10M in ad revenue. That deal seems like a bargain today but at the time, I think the paidcontent.org commentary was that it smacked of FB desperation and that the social network was trying to fake a $2B valuation. Times do change and sometimes it's so hard to be psychic. Lastly, I have to admit that it's a little weird for me to hear the word Facebook everywhere in the Valley since I'd like to remind everyone that it is the namesake of the Harvard freshman registry. At Harvard, also Mark Zuckerberg's alma mater, students obsessively flip through to find cute classmates (ahem, so I've been told). But that said, Facebook has taken that concept to pretty impressive places. The Facebook platform, which I blogged about after the F8 hackathon, was a stroke of genius. One VC told me he thought that move was worthy of Google's Larry Page and he didn't see it coming from Mark Zuckerberg. But it did come from Mark so bravo for Mark! And bravo to Microsoft for a cool deal. | View in Web Browser | /_layouts/images/ichtmxls.gif | /Blogs/beticung/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&DefaultItemOpen=1 | 0x0 | 0x1 | FileType | xlsx | 255 | | View in Web Browser | /_layouts/images/ichtmxls.gif | /Blogs/beticung/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&DefaultItemOpen=1 | 0x0 | 0x1 | FileType | xlsb | 255 | | Snapshot in Excel | /_layouts/images/ewr134.gif | /Blogs/beticung/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&Snapshot=1 | 0x0 | 0x1 | FileType | xlsx | 256 | | Snapshot in Excel | /_layouts/images/ewr134.gif | /Blogs/beticung/_layouts/xlviewer.aspx?listguid={ListId}&itemid={ItemId}&Snapshot=1 | 0x0 | 0x1 | FileType | xlsb | 256 |
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Beti Cung
Online Content & Services
I am a Business Development Manager on the Microsoft Emerging Business team. Most recently, I managed large-scale web projects for Williams-Sonoma Inc. and served as Technology Director at eStyle, a VC-backed multi-channel retail startup. Previously, I was an independent consultant for Qualcomm, Netcom Online Communicati...
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Recent Posts
AdTech San Francisco 2009: Together We Can
April 21, 2009
The spectrum between Love & Lust and Greed & Fear: Review of Dealmaker Media’s VC Outlook 2009
December 11, 2008
Loopt will be free on the new iPhone using Microsoft Virtual Earth
June 17, 2008
First Day of Google I/O -- Does anyone know what I/O stands for?
June 17, 2008
Jajah makes it easy to phone home
May 29, 2008
LiveUniverse + Pageflakes, Greater than the sum of its parts
May 19, 2008
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Featured Startup
The BizSpark startup of the day is Avetrium, based in Canada. You will find below an interview with Tim Smith, COO of Avetrium. All the best to them and congrats for being the startup of the day!
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