entrepreneurs

What does a good Series AA (seed term sheet) look like? – Part1: Liquidation Preferences

by Paul Joseph February 10, 2012 Featured

I have several entrepreneurs asking me for templates of our “series AA” or seed series term sheet. Unfortunately, most of our deals are convertible debt (for companies based in the US, even though they have Indian entities). There is only 1 company we have invested in that is incorporated in Indian alone. I asked a few fellow angel investors to understand what terms and conditions they were seeing in their term sheets. I also got 5 term sheets from recently funded web and eCommerce startups. Some important points that you should keep in mind before you read this post. There is no “standard” term sheet. The reason for that is all deals are unique, dependent on the supply – demand characteristics between the startups and angel investors. If any of your investors say “That’s what the lawyers told me to put in the agreement. Its industry standard practice”, realize that there is nothing the lawyers can or cannot do without the consent of the investors. Everything is negotiable. Just because other startups are able to get favorable terms does not mean you will get the same terms. Numbers and percentages are purely representational, not standard. “Good” in the title of this post means, both entrepreneur and angel friendly, and one that’s not skewed towards one party. In India seed rounds funding as convertible notes are rare and not the common practice. Liquidation preferences are one of the key areas for entrepreneurs & angels to discuss and negotiate Liquidation preference: This means when there is an exit (company gets sold or goes public) what distribution of the proceeds goes to the investors as preferential payment (meaning, they get paid first) before any other shareholder. Let’s take an example. If you raise 1Cr with a pre-money valuation of 4Cr, your investors will own 20% of the company after their investment – 1cr divided by 5Cr (which is the valuation of the company post their money). Now after 18 months another company decides to buy your company for 4 Cr (it’s a aqui-hire – hiring for resources). Since the investors own 20% of the company, with NO liquidation preferences they would get (20% of 4 CR) which is 80L. The other share holders will get 1.2 Cr (which includes founders). If they had liquidation preferences (with a rate of return they mention in your term sheet), they will get 1 Cr plus their ROI, which might be 1 CR, plus 20% (example rate) and the other share holders will get 80L. I think providing liquidation preferences to the amount of capital put into the company makes some sense, because you want investors to at the least get their money back if they can, but anything more than that is negotiable. A good term sheet will maintain liquidation preferences to the amount of capital invested at the most.

Tagged as: accounting, biggest-country, disclaimer, entrepreneurs, guest-columns, indian, lose-something, password, profile-details, social, startup

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Entrepreneurs – Are You Fundable? at 115th 1M/1M StrategyRoundtable For Entrepreneurs

by Paul Joseph February 10, 2012 Featured

Today’s roundtable had a couple of interesting businesses, but before I get to them, I want to underscore that entrepreneurs MUST gauge fundability before assuming that they can build their businesses by raising money. We’re getting this question constantly: Can 1M/1M help us raise money? This short video addresses that question: Now, let’s get to the entrepreneur pitches. TravelTriangle.com First, Sanchit Gurg from Noida, India, pitched  TravelTriangle.com , a marketplace for travel agencies offering personalized tour packages for travelers seeking such help. The company already has engaged about 75 travel agencies and some 900 customers. They have started transacting, generating multiple bids for each RFP and taking a 5% commission off closed deals. Reviews, ratings and other core marketplace functions are part of the offering. Sanchit and his team of six have validated the concept already. I like the idea a lot, especially because traveling in India and South Asia and South East Asia is still quite complicated. Local knowledge and contacts are key, and the logistics of travel can be very complex. Having personalized, reliable service from a travel agent, along with local guides, etc., are attractive value propositions. The market size, however, is relatively small: 5% of $500M or $25M is the estimated Total Available Market for the foreseeable future. Frankly, that doesn’t bother me, since I tend to like small, niche businesses with good, solid execution, which Sanchit’s company is demonstrating. Clearly, a multi-million dollar, profitable business can be built here, and I plan to be a user of the service. In fact, I’d like to design a trip to visit Bandhavgarh National Forest in Madhya Pradesh to see tigers, as well as visit the Khajuraho Temple, ideally during the famous dance festival that is held there. Maybe one of the travel agents on TravelTriangle can help put this together for me. For the time being, the company is seeing maximum interest from travelers who want to visit Rajasthan, Kerala and Sri Lanka. BabbleTAB Next, Andrew Jaffa from Jacksonville, Florida, pitched  BabbleTAB , a social media marketing service that generates relevant content for the Facebook pages of small businesses like car dealerships, restaurants, retail, etc. Andrew wants to offer a tablet-based console on location that would capture video and images of customers and post them to the businesses’ Facebook pages. The business model is a subscription service with a small fee per loaded image. We brainstormed today about the adoption barriers and whether consumers would take the trouble to be photographed or recorded. Andrew’s preliminary research says that they would if offered the right incentive. In a car dealership, for example, he thinks a $250 discount would be a substantial enough incentive. I am listening to the use cases but would like to see a statistically significant validation exercise done on the idea. We also discussed Andrew’s proposed tiered pricing model, which I felt was too complicated. A simple flat pricing would be more appropriate. Andrew agreed and is planning to change the model. If you want a deeper relationship with me, you are very welcome to  join the 1M/1M premium program . If you have any questions about the program, please, first study the website, especially  What to expect from the 1M/1M premium program  and the  FAQs . If you have additional questions, please email me, and I would be very happy to respond. Please note that I work exclusively with 1M/1M entrepreneurs.

Tagged as: biggest-country, employee, entrepreneurs, guest columnists, guest-columns, password, popular-on-cloudstory-in, profile-details, random-member, social, sramana-mitra

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Dezains : Zinging it up with caricatures

by Paul Joseph February 10, 2012 Featured

Dezains prints hand-made caricatures on mugs and tees from the photos you provide Lazing in his chair at a job after his engineering, living the life of a sinecure, Ankit was toying with the idea of starting up. As is usually the case, Ankit and his group had a zillion b-plans but thanks to the size of the group, each idea was repressed. Nevertheless, while at his job, Ankit setup a website for selling printed tee shirts but he soon realized that these kind of websites are present at a dime a dozen and would be hard to capitalize. Cofounder, Ankit He didn’t have to look far for something unique as his brother Amrit, the creative guy, was seeing huge traffic for his caricature making service (free at that point). Taking the cue, armored with his business acumen, Ankit took over from where Amrit left it. This was how Dezains took birth. The stage was set but Dezains needed someone to orchestrate the show. Step in Prannoy. Having worked in Bangalore for a year, Prannoy shifted base to Mumbai to get the show going. They invested a lot of time in designing the layout of the website and building the website in-house. Ankit was responsible for building the website while Prannoy set in place the processes. Dezains officially launched on the 23 rd  of August, 2011 and with a  little buzz created pre-launch, Dezains saw 1600 visitors on the first day. They have been growing steadily ever since and process 25-30 orders each day now. Having served over 3000 customers by now, Dezains employs 3 fulltime and 6 part-time caricature artists. Cofunder, Prannoy All the caricatures are hand drawn using a tablet so that it directly comes in a digital format which saves a lot of time over the traditional methods. Dezains has a huge fan base in the online space with more than 50,000 fans on the Facebook page. They have also teamed up with seal sites like Groupon and Anapdeal to accelerate sales apart from running google and facebook ads. In an interesting marketing campaign, Dezains allowed you to send a free gift card on New Year’s day to the person you wanted to by entering his details on the website. Offline, Dezains has sponsored a few college fests which goes a long way in creating a loyal customer base in the college crowd as this is the audience most likely to buy caricature products. In what has been a very interesting journey till now, we’d sure be looking forward for more from the Dezain stable. In a recent post, we had a look at Graphicurry , who’re also doing interesting things in the graphics arena. – Jubin Mehta

Tagged as: accounting, entrepreneurs, guest columnists, guest-columns, patents, popular-on-cloudstory-in, random-member, technology

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Myntra.com Targets Rs 500 crores Revenue for the Next Fiscal

by Paul Joseph February 10, 2012 Featured

Myntra.com , one of the largest online retailers of fashion and lifestyle products in India, is aiming revenues of Rs 500 crores in the 2012-13 financial year. The company which entered the lifestyle and fashion retailing segment in December 2010 has registered a ten-fold growth in 2011 and is growing fast in the e-commerce space in India. Mukesh Bansal, Founder & CEO, Myntra said, “Myntra has undergone phenomenal growth in the last 12 months. We have been consistently doubling every 4 months and have now reached a scale where we ship up to 10,000 products every day. We are planning to cross revenue of Rs 500 crores in FY 12-13, which will further strengthen Myntra’s position in the lifestyle category. This is an exciting category with the total market size projected to be over $100 billion in 5 years with mid single digit portion being online, making this, possibly the largest online category in India.” He further added, “We have built a large catalog in the fashion and lifestyle category with over 200 brands, have extensive supply-chain capabilities including world-class warehouses in multiple cities and our own logistics network in large cities. We will continue to invest aggressively in our technology platform, supply-chain and the Myntra brand to rapidly scale the business.” The e-commerce company has received overall funding of $40 million through top-tier VCs like Tiger Global, IndoUS, IDG and Accel Partners.

Tagged as: accounting, disclaimer, employee, entrepreneurs, guest columnists, guest-columns, indian, lose-something, patents, press releases, random-member, social

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Five Mistakes to Avoid in Global Marketing

by Paul Joseph February 3, 2012 Featured

Taking the leap and marketing your business overseas could be the best decision you make this year. The economic outlook might be gloomy in the United States and Europe, but that’s far from true in the rest of the world. And for small to medium business owners, the internet is a relatively cheap way to tap into growing markets. That’s not to say it’s foolproof. As with any marketing strategy, it  pays to do your homework. We’re sure that Ford wishes it did a little more research before launching its Caliente car in Mexico. The name is slang for “streetwalker” – perhaps not the image most car buyers aim for! From picking an offensive product name to falling foul of internet censorship in China, there are plenty of pitfalls waiting to trip up would-be global entrepreneurs. But the good news is, the payoffs can be huge if you get it right. While the number of foreign language internet users is growing rapidly, most content is still in English. This means it’s much easier to rise to the top of the search engine rankings in other languages, simply due to less competition. And with growing opportunities in emerging markets, such as the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) it can represent a much higher ROI. 1. Don’t let your website get lost in translation We’ve all heard amusing translation errors, or product names that simply don’t work  in other languages. Anyone wondering why Clairol’s hair-curling iron, the Mist Stick, sold poorly in Germany should know “Mist” means “human waste”. And most users are turned off by poorly-written websites that are difficult to understand. There’s no doubt Google Translate and similar tools have their uses. But when  it comes to translating your website or marketing materials, it’s worth hiring native-speaking translators to ensure its word-perfect. Internet marketing or localization specialists can advise on countries to target and any potential issues with brand names or slogans. Don’t follow the example of Pepsi’s Chinese advertising campaign, which claimed the drink could (literally) bring ancestors back from the dead! 2. Don’t ignore local or cultural differences It might seem cheaper to set up a single website to cover France and Quebec, or assume your European Spanish site will do for Latin America. But there are significant differences in language and culture. For example a “coche” means a car in Spain, but a “baby stroller” in much of Latin America. It doesn’t take a huge amount of effort to localize each website for a specific market. This also allows you to choose products and advertising aimed specifically at each country. Plus, adding local references helps build trust and inspire confidence in your company. 3. Keep it simple. For small companies, setting up a foreign website is far cheaper than establishing an on-the-ground presence in a new country. But many fall flat by failing to have an easy system to deal with enquiries or take payments. If you can’t afford international sales staff, then restrict communication to email or online forms. Cut costs by using free translation tools to understand emails, then hire freelance translators to ensure the replies are accurate. And make sure you have an easy payment system – whether that’s credit cards, checks or Paypal. 4. SEO doesn’t always translate well There’s no point having a beautifully designed, easy to use website if no one can find it. Many companies think they just need to translate their keywords into different languages, but this isn’t always the case. Taking time to research popular keywords and commonly-used search engines in each country will pay off in generating extra traffic – and sales. For instance, did you know many Italian users often search for English words and phrases? Tools such as Google Global Market Finder are a good place to start. But remember, Google isn’t king everywhere – the Chinese prefer Baidu, while Yahoo still leads the way in Japan. 5. Don’t forget non-English speakers closer to home Around 34 million people speak Spanish at home in the United States. But if your website’s only in English, they probably won’t read it! There’s no doubt people prefer to browse the internet in their native tongue. A European Commission report found 82 per cent of online shoppers were reluctant to make a purchase if there was no information in their own language. This applies just as much to non-English speakers at home as abroad. Christian Arno is the founder of professional translation services provider Lingo24 . Launched in 2001, Lingo24 now has over 160 employees spanning three continents and clients in over sixty countries. In the past twelve months, they have translated over 60 million words for businesses in every industry sector, including MTV and World Bank.

Tagged as: business, entrepreneur, entrepreneurs, entrepreneurship, global business, global marketing, marketing, marketing-strategies

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Sanjay Anandaram on Entrepreneurial Persistence

by Paul Joseph January 9, 2012 Featured

In today’s world of instant gratification, where instant karma is sought, where words like “pivot” and “ lean startup” have found their way into startup and entrepreneurial lexicons, compatible with the quaint approach of the dogged persistent entrepreneur, is access to money and technology leading to the danger of creating instant entrepreneurs but without the staying power required to create and build companies and organizations? A problem that had confounded mathematicians for 358 years was solved in 1995 by Andrew Wiles who had been fascinated by Fermat’s Last Theorem ever since he encountered it at the age of ten. It was childhood and adult dream to solve it and he did it in incredibly style, working virtually in isolation during the last 8 years. He was a little more than 40 when he solved the problem! Magellan, the first person to circumnavigate the globe, failed in his first few attempts but finally delivered – on his 7 th voyage – on his claim that it was indeed possible to go around the world. Mahatma Gandhi’s extraordinary achievements wouldn’t have been possible but for his stubborn persistence on following a vision and methods in spite of immense personal hardships. The world’s greatest inventor Thomas Edison, while trying to find the right material for the filament for his electric bulb, experimented with over a 100 different materials before finally selecting tungsten. Infosys was founded in 1981 and reached, after an incredible ten year journey, revenues of about Rs 8 crores (in 1991 dollars). In 1990, NRN Murthy offered to buy out the shares of co-founders as some had expressed fatigue. They stayed back with Infosys. And closer to our times, Deep Kalra started MakeMyTrip in 2000 and, after the dotcom bust, with two senior colleagues bought back equity from the investors and went without salaries for 18 months. Kalra says, “It worked out, so we can say we were resilient. But at the time I worried I was just being stubborn. But I figured you regret the things you don’t do in life, not the things you do.” These are but very few examples from the achievements of a great many people from all walks of human endeavour that bear testimony to their incredible ability to persist when confronted with innumerable problems and when, at times, all seemed lost. Great explorations in science, technology, archaeology, geography, medicine, sports and other fields would never have happened without incredibly dogged persistence.   While some of the examples from above aren’t those of entrepreneurs as understood generally, they certainly are of people with amazing entrepreneurial mindsets – passionately driven by a goal, incredible problem-solver/opportunity grabbers and extraordinary leaders. It is crucial to realize that, at the end of the day, entrepreneurship is about solving a problem or capturing a possibility. It is about the passion and almost obsessive desire to achieve the goals. To do so, one must be able to listen, learn, adopt and adapt from the signals from those around – customers, partners, employees, suppliers, competitors, experts, advisors. This forces the goal to be more focused and sharp while maintaining its fundamental promise.  The means to reach the goal however have to based on market conditions. After all, if one is travelling from Bengaluru toDelhi, one can adopt different means of transport depending on the conditions, one’s desire and pressures of time, effort and money. But the start and stop points are fixed. So with startups. One’s vision has to be clear (“A computer on every desk” – Microsoft; “Organize the world’s information – Google”), the means can vary as they indeed should. So the next time, someone talks about pivoting, ask them what they mean! More importantly, ask yourself if you are taking decisions based on signals from the market or based on your ego. But at what point does dogged persistence become stubbornness, obstinacy and foolishness? What about the many who remain devoted to their approach, persisted in their approach and failed? There’s a thin line between foolishness and genius. The thin line separates those who listen, learn, collaborate and execute in a continuous cycle from those who remain insular, focused only on their approach. While the goals may be same, the methods clearly vary. History has shown that it sides with those who react to the environment. Indeed, evolution has shown that it is the adaptation of a species to the environment that ensures its propagation. As the cliché goes, change is the only constant but the goals of every change are the same – a better, faster, cheaper solution! Reinhold Messner, the greatest mountaineer of all time, perhaps says it best: “The retroactive giving of meaning is a typical consequence of real success. At the start, there exists an idea; then there are detours, setbacks, opposition, experiments, and risks. Only through tests, accidents, and persistence does the one right solution come out and future success become clear” About the Author Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.

Tagged as: entrepreneurs, persistence, resources, sanjay anandaram

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5 Reasons NOW is the Time to Start a Business

by Paul Joseph December 27, 2011 Featured

Will 2012 be the year you start your business? If you’re not already an active entrepreneur, now is the perfect time to take that leap. And if you are, it’s time to take it to the next level. The fact is, any year is a good year to start a business. Yes, the economy is still in sorry shape in a lot of ways, and many signs point to that remaining an issue throughout 2012. To some, that means it’s a risky time to start a business. But while the economic climate has certainly had a negative effect on many entrepreneurs, I’m thankful to be a business owner right now, versus an employee. 5 Reasons to Become an Entrepreneur in 2012 1. It’s safer than employment. One thing that has always set entrepreneurs apart has been their willingness to take risks. So why are we seeing such a phenomenal increase in people starting their own businesses? Are there that many more risk takers out there? I don’t think so. I think it’s because people are realizing that the real risk is in working for someone else. One of the great advantages of entrepreneurship is being in control of our own destiny. Outside forces, like economic conditions and changes in the marketplace will obviously affect business owners, but we have infinitely more options to respond to those challenges than someone who’s laid off from a job because of them. 2. Support at Your Fingertips. Expect tools and help available to entrepreneurs to continue to increase in 2012. So many people are turning to entrepreneurship now, supporting them has become a thriving industry of its own. Just about anything you want or need to help you thrive in business is available online, including mentoring, support forums, blogs like this one, and much more. 3. The Opportunities are Plentiful. There has never been a time when opportunity didn’t exist. It might be harder to find or capitalize on it sometimes, but it’s always there. 2012 will be no exception. As long as there are needs and desires in the market, there will be opportunities for entrepreneurs to fulfill them. For 2012, look for new opportunities in tech, online, medicine, and even retail sectors. 4. Technology is Advancing Exponentially. If you think changes in technology are happening at a rapid pace now, just wait. We’re fast approaching the “knee of the curve” in technological advancements. That means that speed, functionality, and ease of use will begin to double faster than ever before, and huge strides will be made in everything from online platforms to medical science. Keep an eye out, stay informed, and look for needs created by new technology. Who knows… you could be the next Google! 5. Differentiation will get Easier. You might think that with so many people starting businesses that competition will make it difficult. There are advantages to competition though, and the main one is the ability to differentiate. In any field, 80%-90% of those who enter it do it all wrong.  They don’t offer the quality people need; they don’t market well; and they don’t provide decent service. It’s easy to stand out in that group, just by being the best you can be and giving people what they want. Adam Toren is an Award Winning Author, Serial Entrepreneur and Investor. He is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs .

Tagged as: become an entrepreneur, business, business planning, entrepreneur, entrepreneurs, entrepreneurship, starting a business, startup

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Team Rajiv targets Rs 1000 cr sales in 5 years

by Paul Joseph November 7, 2011 Featured

Gujarat’s leading player in the polymers, woven sack bags and fabrics, Rajiv group is eyeing to achieve Rs 1000 crore sales in next five years.

Tagged as: business, entrepreneurs, Gujarat, management, petrochemicals, polymers, Rajiv, SME

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4 Lifestyle Patterns Successful Entrepreneurs Share

by Paul Joseph November 4, 2011 Featured

Successful entrepreneurs make profits from their passions. They decide what actions they must take in order to establish or grow their own business. After speaking with many entrepreneurs from all different fields, it has become increasingly apparent they all share specific habits and lifestyle patterns that help keep them motivated and push them forward. 1. Wake up and go to sleep at the same time everyday. Contrary to entrepreneurial belief, pulling all-nighters all the time won’t always make your business succeed any faster. Of course sometimes they’re necessary, but even if you are waking up at 10 AM and going to sleep at 4 AM, the regularity of your schedule will be something that your body can adapt to and the consistency will work in your favor when it comes to mental and physical performance. Lack of consistency in your sleep patterns can dramatically affect your ability to properly manage stress as well as your concentration when it comes to the most important of tasks. For example, if you plan on making up for all of your lost sleep on the weekends, you will find yourself less productive and focused both during the week and on the weekends. Even if it isn’t a lot of sleep, consistent sleep patterns are vital to maintaining high mental performance. 2. Exercise for 30 min before beginning work for the day. Exercise time, even if only for 30 minutes, can help keep you in shape and make you more prepared for the day. If you’re a jogger, jog, if you’re more of a yoga person then do yoga. By exercising you release endorphins that will actually in turn help you to focus better when it comes to concentrating on the next project or task. This valuable time also frees you of distractions like email and cellphones. Sometimes it pays to have this time even if it is only for 30 minutes a day. You will discover that undistracted time enables you to more clearly see the big picture of your business – where you are and where you want to be. And of course, immediately record any new ideas or thought breakthroughs that you may have as soon as you finish your exercise routine. Successful people always write their thoughts down. 3. Spend the first 2-3 hours of everyday focused only on the actions that make you money. For me this is reaching out to new clients and returning inquiries from potentially interested ones. The time you spend should be directly correlated to your income and should not include administrative tasks or to do items that you could get done later in the day. It is important that you log off of Facebook, Twitter, and close your email programs during this time. Lower the possibility of distraction by trying to eliminate as many of the common ones as possible. Try to make this your ‘wired in’ time – think ‘The Social Network.’ Breaking your day into sections will help you organize a lifestyle workflow. Personally, I dedicate three hours each day to the area of my business that make me the most money – finding and converting leads. Things like travel arrangement, managing interns, writing blogs, and other non-income generating activity is kept strictly out of my ‘wired in time’. 4. Devote an hour a day to relevant industry news. You’ve probably met a professional in a particular industry who is not up on their own field. I find this to be an amateur mistake. Even if you are successful at what you do, there is really no excuse not to know what your peers and competitors are up to. Try to organize feeds of the most frequented places that your peers contribute to online, you never know when having just a bit more knowledge about someone or the project they’re working on may turn out to help you big time in the future. Successful people are constantly following their peers and learning from them, after all, what someone does poorly may be an opportunity for you to do well. Study the people you look up to at their first steps and not only at their present success. Bonus: Analyze where your existing time is going – RescueTime.com This is great software that will tell you how you spend the time in your day. From how much time you spend on Facebook to how long you spent working in Photoshop, Rescue Time can help you make smarter choices with your time and enable you to focus more of your energy on the things that will help drive your business forward. Michael Costigan speaks to teens and adults about effective communication so that they may make better informed decisions together. Read more about Michael here .

Tagged as: business, entrepreneur, entrepreneurs, entrepreneurship, motivation, success

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How to Make New Media Work for Your Business: Interview with Neil Rosen, Author of Chatter Marketing

by Paul Joseph November 1, 2011 Featured

New media, which encompasses all aspects of online marketing, such as social media marketing, blogging, comment marketing, and more, is everywhere we look these days. It’s almost impossible to find ads even in traditional media that don’t point to a company’s Facebook and Twitter pages, and the web is replete with blog posts, e-books, websites, you name it, talking about how to market using new media. Still, many business owners are struggling to figure it all out and make new media work for their business. In Neil Rosen’s new book, Chatter Marketing: Putting the Relationship Back in Customer Relationship Management , he helps to shed light on this important topic and shows entrepreneurs not only the importance of new media marketing, but how to use it effectively. Chatter Marketing is an excellent book for anyone who wants to truly engage with customers and potential customers to build a community of interested “bought in” individuals. I highly recommend it and am pleased to have had the opportunity to ask Neil some questions about the book and his marketing philosophy. Matthew: Your book, Chatter Marketing , focuses on how businesses can use new media to attain and keep customers. How is the Social Web uniquely positioned to accomplish this? Neil: Marketers so far have been playing catch-up on the web, spending their time and resources protecting their brand, including spending a fortune buying their own brand keywords on the search engines. But marketers have one great advantage. They already have relationships with their customers. And the social aspects of the web are uniquely able to help marketers leverage those relationships, get the “first look” at what their customers are doing, have the “first transaction opportunity” with their customers. But they need to get pro-active. Marketers need to reverse the keyword flow structure and truly follow their customers and listen to what they are doing and saying. They need to know what keywords their customers will be typing into the search engines before they get to the search engines, and communicate with them early in the process—again, before they get to the search engines. They need their customer communications to be intuitive in order to make shopping from them the most convenient possible customer experience. Next companies need to identify their ambassadors, enthusiasts, and influencers, and (especially by using email and social campaigns) leverage this group of people to become the brand’s sales force and help build business. Matthew: If a small business owner is new to social media, what is one important step he or she should take to begin using it effectively? Neil: The first step is to tune in – monitor what is being said online about your company within your specific competitive market (I call these micro-competitive environments). The competitive aspect is crucial and creates a context for everything being said about a specific brand. Monitoring your own brand without listening to the competitive chatter specific to your market can create serious misconceptions and misrepresentations about how your brand is viewed in the marketplace. And the second step is just to “get in the game.” Use the major social sites like Facebook, Twitter, LinkedIn and YouTube to get started, maintain consistent activity on each of these sites, and listen and learn what happens as you are building your presence. Don’t try to do everything at once. Create a solid presence in a few places and make sure the campaigns you execute build positive brand reputation – when you see that happening consistently think about expanding the presence. Matthew: What is one key take-away that you want everyone to get from Chatter Marketing ? Neil: That for both marketers and consumers the social internet creates opportunities to develop a level of convenience in shopping that will strengthen customer relationships beyond anything in history. Loyalty is not dead, it has simply been put on hold until brands (and service providers) figure out how to best take advantage of these opportunities. Matthew: Do you propose different marketing strategies for each social platform (Facebook, Twitter, LinkedIn, etc.)? Neil: I think companies need to work with service providers who know the space and not try to do it in-house without the proper expertise. The social space is both volatile and persistent (which is not an oxymoron!). Brand reputations can be dramatically grown and/or significantly harmed overnight, with the effects lasting far longer than what marketers are used to seeing offline, and the same strategies that drive positive brand reputation on Facebook may not have the same effect on Twitter or LinkedIn. Campaigns and strategies need to be carefully tested and monitored to understand the influence they are having on specific social environments before being launched, and this takes a high level of experience and expertise. Matthew: As a new media and Web 2.0 expert, looking to the future of technology, what do you see for “Web 3.0” and how do you think social media will evolve? Neil: The more people think things change, the more they remain the same. With online marketing it is still all about something Seth Godin talked about many years ago: interruptions. People still react negatively to interruptive marketing. So the trend for 3.0 and beyond will be toward technologies that seamlessly integrate relevant marketing content directly into chatter, where the chatter itself defines the content and the promotions that are included in the conversations. In addition, the privacy conversation is going to go away as technologies do a better job of filtering personal data, and as people become comfortable that the data driving marketers excludes personal information. Matthew Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Adam. Matthew is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs .

Tagged as: business, entrepreneur, entrepreneur interview, entrepreneurs, entrepreneurship, facebook, internet marketing, marketing-strategies, social-media

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