In Ramon’s most recent post, he pulls ten tweets from the infamous @shitmydadsays Twitter account.  He then makes a fairly relevant observation that marketing and product management teams should take to heart.  I have excerpted a few below, but for the full effect you should click through and read the entire article. 

Branding

“Oh please, you’ve practically invented lazy.  People should have to call and ask you for the rights before they use it.”

Key takeaway: Find your core competency, own and brand it. Sometimes it’s staring you right in the face.

Alignment

‘A parent’s only as smart as their dumbest kid.  If one wins the Nobel prize and the other one gets robbed by a hooker, you failed.

Key takeaway: In order to truly succeed, Sales, Marketing and other areas of your organization need to be aligned

Messaging

‘That woman was sexy . . . Out of your league?  Let women figure out why they won’t screw you.  Don’t do it for them’

Key takeaway: Test your message with your target audience. Don’t assume and don’t guess, be aggressive and don’t be shy

Solutions

‘Son no one gives a shit about all the things your cell phone does.  You didn’t invest it, you just bought it.  Anybody can do that.’

Key takeaway: Don’t fall in love with the features of your product. Focus on solutions and benefits to your customer.

Budget

‘Everybody’s broke, so here’s the rule for Christmas this year.  If you still shit in your pants, you get a present.  Otherwise tough shit.

Key takeaway: Don’t complain about your lack of marketing budget. Make the most of what you have.  Twitter and other social media are excellent new marketing tools and are still free … for now.

Overall it was a pretty impressive event.  There were close to 400 attendees who represented a ‘Who’s Who’ of the Atlanta venture capital and technology community.  The presenting startups ranged from Abundant Closet, an online virtual closet and automated personal stylist to Viral Prints, a place where online video producers and fans alike can design, purchase, and sell merchandise based off of their favorite online videos.  Some of the presenters were veteran entrepreneurs while others were first timers.  While I’ve been pitching private equity firms and VCs deals for years, it takes a lot of guts to stand up in front of 400 people to pitch your idea.  Exposing yourself to either instant Internet fame or infamy via Twittering / BackNoising attendees is pretty tough too.

The event got a lot of press and TV coverage, including feature spots on CNN, NPR, and the local NBC affiliate.  For a full overview of all of the presentations check out Lance Weatherby’s live blogging of the event here.  Lance is a venture catalyst with the Advanced Technology Development Center, a Georgia based technology startup accelerator. 

Out of all of the startup presenters, there were three that caught my eye and I thought you’d enjoy learning something about.  These companies include LessAccounting, Looxii, and Nexpense.

LessAccounting is a highly functional, web based, accounting application for small businesses.  They offer a highly competitive solution in comparison to QuickBooks.  Allan Branch was easily the best presenter at Startup Riot.  He used two simple concepts to explain LessAccounting’s value proposition: 1) QuickBooks is Evil & 2) LessAccounting.  As a long time user of QuickBooks online I tend to agree.  Allan was also the only presenter to drop an ‘F-bomb’ during his three minute pitch.

Looxii is a social media analytics solution.  Looxii provides a mechanism to sort, track, analyze and act upon the social media data that matters most to you and your business.  The team at Looxii understands that most social media analytics solutions today are overly complex, expensive, and hard to use.  Looxii is social media listening made as simple as possible.  One of my ongoing areas of research is the monetization of social media and social media analytics.  Looxii takes a very simple, but effective approach to social media monitoring and analysis.  You set up search terms associated with your brand or key concept.  Looxii scours the web for relevant mentions and presents them in a list where you can assess its relevance as well as the positive, neutral or negative sentiment the item represents.  Looxii then summarizes them into simple graphs and reports so you can track.

I recently joined Looxii’s private beta and used it to start to track the social media reputation of a friend of mine’s new company, Pragmatic Marketing.  Here are a few screenshots:

Daily Tracking Graphs

Search Term Feed Analysis & Sentiment Rating

nexpense is a next generation expense report solution.  It launches in early April.  The service enables you to use your smart phone to take pictures of receipts, code the item, and submit it to the nexpense SaaS application.  On a predetermined basis nexpense will then generate an expense report for you in Excel and email it to you.  You can also review and track your expenses online.  For someone like me who travels a lot for business and is a slacker about doing expense reports this application could be extremely valuable.  My wife has been pestering me for years to do my expenses for me.  With this application all I have to do is snap a picture on my phone and enter a few details about the expense.  My wife can then take the generated expense report and reformat it into my company’s form and submit it for me.

If you are an enterprise or mid-market technology company and you have been in business for more than 5 years your revenue growth rates have probably declined into the single digits.  Markets in the early stages of the Technology Adoption Life Cycle tend to have very high revenue growth rates – markets in the latter stages of the life cycle tend to have significantly lower growth rates.  If your company’s products/services are in the middle to latter parts of the life cycle it is harder to sell new customers.  In 2010 a lot more companies will be looking to acquire social media analysis/monitoring platforms, hardware/software virtualization, and cloud computing services than those looking for ERP solutions, mainframe job scheduling, or electronic data interchange.  This does not mean that there are not significant revenue opportunities for older technologies – it just means that you have to work a lot harder since most buyers do not wake up in the morning and say “I really need to buy some middle-aged technology today!”

Manufacturing revenue is a reality for mid to late stage technology companies.  The first revenue generating technique we are going to talk about is euphemistically entitled ‘bowling league sales.’  Generally, in the early majority/late majority stages of the technology adoption life cycle, people prefer to buy technology solutions that have been endorsed by their peers and competitors.  The most credible buying influence is an honest recommendation from a friend or someone in the local area that is well known and respected by their peers.  Kind of like the people who might participate in your bowling league, local United Way campaign, or even your Church.  The goal of the bowling league sales program is to develop dozens of influencers in specific geographies and verticals that can assist you in your sales efforts.

How the Technology Buying Process has Changed in 2010

The bowling league sales strategy is predicated on the fact that the technology buying cycle has fundamentally changed in two key ways in 2010.  In the 1990’s prospective customers read trade magazines like ComputerWorld, Dr. Dobbs Database Journal, or PC World to keep abreast of industry developments.  Or they talked to industry analysts like Gartner or Forrester.  They also called the sales teams of leading vendors and had them fly in and give ‘informational briefings’ on new technology trends.  In 2010 the first stop for prospective technology buyers is the Internet and Google.  Online research is now the predominant way that prospective customers learn about potential solutions for the problems they are looking to solve.  The second key trend is the concept of lead nurturing.  How many times have you visited a vendor’s website only to be interrupted from a pop-up window inviting you to a live chat with one of their representatives?  9.9 times out of 10 you decline the chat opportunity because you are not ready to engage that directly with a sales person.  Lead nurturing recognizes that prospects go through several levels of education and interest before they are willing to expose themselves to the onslaught of your sales machine.  Lead nurturing is a recognition that only a few of the visitors on any web property are interested in buying right now.  As noted in the great book, Digital Body Language by Eloqua’s CTO Steve Woods, the three major goals of lead nurturing include:

1. Maintain permission to stay in contact with the prospect: This is by far the most important goal of lead nurturing, and one that is most often overlooked. If a prospect emotionally unsubscribes  you have lost your connection with them, and you may in fact be marked as spam.
2. Watch for signs of progress through the buying cycle: As you nurture prospects, you can watch their digital body language to give you an understanding of when they are moving to a new stage of their buying process 
3. Establish key ideas, thoughts, or comparison points through education: A prospect you are nurturing may not enter a buying process for many months, if not quarters. However, if you can educate prospects, and by doing so, guide their thinking slightly to incorporate key requirements and ways of analyzing the market, when they do become buyers, you will be much better positioned

One of Steve’s core concepts is digital body language.  Since Internet research has replaced face to face meetings as the primary mechanism for prospects to learn about solutions, traditional sales teams are at a disadvantage since they can no longer read the body language of prospects.  Instead, vendors have to rely upon their ability to understand a prospect’s digital body language:

What we are referring to when we talk about Digital Body Language is the aggregate of all the digital activity you see from an individual. Each email that is opened or clicked, each web visit, each form, each search on Google, each referral from a social media property, and each webinar attended are part of the prospect’s digital body language.

In the same way that body language, as read by a sales person managing a deal, is an amalgamation of facial expressions, body posture, eye motions, and many other small details, digital body language is the amalgamation of all digital touchpoints. 

The Bowling League Sales Program

The Bowling League Sales Program is composed of four major activities.  We explore each of these items in more detail later in this post.

Geo-location Profiling.  The process begins by analyzing the geographic locations and verticals of your existing customer base.  By knowing where your existing customers are based you can identify high potential geographic locations where you can find other customers and help focus your resources accordingly.

Success Stories Blog.  Stories, written from the customer perspective, about how they achieved significant business benefits or solved hard problems.  The focus of these stories is not your technology per-se, but the results individuals were able to achieve leveraging your solutions.  These stories will become the key content that will entice prospects to learn more about your firm.  You will publish these stories in a purpose-built blog that is loosely affiliated with your brand.  You will attempt to turn these existing customer successes into influencers in your market space.

Geo-Specific Social Media Broadcasting.  As you post each story you will broadcast it via a number of social media platforms and build a social network of individuals that are interested in your stories.  This includes not only prospects but other social network participants with market credibility who are looking for content to publish on their own web properties.

Digital Body Language Monitoring.  Finally, you will put in place the basic tools and technologies to monitor the digital body language the of the participants in your business social network so you will know when and how to engage with them once they are finally ready to start a formal buying process.

Now I know this sounds like a ton of work, but guess what, that’s what it takes to manufacture revenue.  It’s like panning for gold – you have to move through a ton of stuff to find a few golden nuggets.  Take a look at the 2009 performance of your firm’s marketing programs.  If you are lucky you were able to convert 0.10% of your prospects to a paying customer.  In other words 1 out of every 1,000 people your firm connected with ended up buying a technology product or service from you.  You need to find ways to better leverage the Internet and the power of social networks to grow revenue.  You can always stick with strategies and tactics you used in 2009 and you can expect about the same results.  Or you can stake out a position at the start of a new year to at least try something innovative.

Geo-Location Profiling

The process begins by profiling the geographic locations and verticals of your customer base.  This information will allow you to focus your energies on a few geographic locations.  Consider the following map of one company’s 8,900 customers in the U.S.

As you can see, a significant portion of the customer base is concentrated in five states – New York, Georgia, Illinois, Texas, and California.  It would not be too surprising to find that there were sales offices in all of these geographies at one time or another.  This company specializes in software solutions for manufacturing and construction companies.  Take a look at the following table to get an idea of their relative market share in each of these states:

The table shows that there is still plenty of untapped opportunity in each of these geographies.  The goal of the bowling league sales program is to raise the visibility and awareness of the company in the thousands of prospects in each of these geographies.

Putting together analyses like these is a pretty straight forward process.  First you need a dump of your customer information: name and address.  You can supplement that information with vertical info, such as the customer’s NAICS code.  Third party services can append this data to your customer list for a nominal fee or your team could spend a few days data mining the information off of the Internet.  The Google Maps API provides a simple way to generate maps and the Census Bureau’s Economic Census can give you tons of stats about the number, size, and employment of companies in a host of verticals on a national, state, or metropolitan statistical area basis.  If this seems like too much work you can always hire a local geography professor who should be able to crank out the analysis for less than $500.

Success Stories Blog

Next, build a basic blog that you will use to publish success stories written from the customer’s perspective.  The blog should be independent of your corporate website and existing blogs, but branded in a similar manner.  The goal here is not to hide the fact that your firm is sponsoring the blog, but to put the focus on your customer’s stories and experiences.  You can use something as simple as a hosted WordPress instance and either a free or low cost WordPress theme.  You should also establish social media identities for the blog on a variety of business centric social media platforms such as Twitter, Facebook, LinkedIn, FriendFeed, Slideshare, Technorati, Digg, StumbleUpon, etc.  You should also implement decent web analytics such as Google Analytics.

The primary content of the website will be relatively short, one page posts about the business success a customer had with your technology.  The posts can either be attributed to the customers or genericized.  Many customers are reluctant to publicly endorse a vendor’s solution.  In situations like that the post can be written in a generic manner that does not specifically identify the customer’s organization or the individuals who were involved.  People love to see their names and accomplishments in print.  It helps to validate their successes and build their reputations both inside and outside of their companies.  The most successful ad I ever ran was a one page piece in ComputerWorld that had the pictures of ten customers who enjoyed tremendous success from our product.  The ad was simple – their picture, name, title, and location.  We got more leads from that one ad than almost anything else we did.  I have visited several of those customers ten years after the ad ran and they still have a framed copy of it posted in their offices.

To get started you can use a simple, interview-like format of five questions to structure the content for the posts (tell me about your company, what problem were you trying to solve, how did you go about solving the problem, what hard and soft benefits did you achieve, what did you learn that you will apply next time, etc.)

To jumpstart your content you can repurpose your existing customer references, testimonials, and success stories.  At the same time you can start building up your editorial calendar by approaching your customers and soliciting their participation in the blog.  You should target posting two customer stories a week, interspersed with other content you choose to create or co-opt from other sources.  If you have hundreds or thousands of customers you can find a hundred or so that would like to have their successes chronicled on your site.  There are several tactics you can use to solicit participation.  Some ideas include:

1. Ask the sales team to nominate up to ten of their best customers as candidates.  Ask the rep to set up an introductory call and ‘listening’ session with the customer and see if you can entice the customer to participate in the process.
2. Take a look at your customer support statistics and identify the top 200 customers with the most inquiries and tickets.  These types of people are very actively engaged with your company – the customers with the most ‘problems’ are actually some of your best customers.  It’s the customers who don’t complain that you should be worried about.  Find the primary customer support reps who deal with these customers and ask them to solicit participation the next time they call or email.
3. Add a message to the next invoice asking for volunteers to participate
4. Add a message to the home page of your corporate website asking for participation

There’s no doubt that it is a lot of work to solicit participation, draft the posts, and go through whatever review and approval processes your customers will require.  As noted earlier manufacturing revenue is not a simple or overnight program.  The benefits of building good content, however, last for a long time.  You will also find that the process of engaging with customers on a positive basis will not only improve customer satisfaction, but drive incremental revenue as well.  Most mid to late stage technology companies only engage with their customer bases when they have something new to sell them or to offer them a discount in an attempt to drive short term revenue.  Take a look at the last ten direct marketing pieces you sent your customers and you can get a pretty good feel for how you have been communicating with them.

Geo-Specific Social Media Broadcasting.

As you post each customer success story, broadcast it to you ever growing business social network.  The goal of this process is to continually build a geographically targeted list of followers and blog readers in the geographies you have targeted.  Broadcasting your posts using technologies like Twitter, Facebook, LinkedIn, SlideShare, and StumbleUpon will help to build the reach of your blog and message.

Building a Twitter follower network is one of the better investments you can make.  You want to focus primarily on active Twitter users that have some association with your industry in the specific geographies you want to focus on.  I am not going to get into the details of building a Twitter following here — there are hundreds of thousands of Twitter strategy guides available on the web (Google only reports 34.5 million).  The key to building a successful business social network is relevant content and that’s what your customer success stories can bring to the table.

Digital Body Language Monitoring

Once your blog is up and going and you have some decent content there you can begin to monitor your visitors’ digital body language.  You can use free tools like Google Alerts, Google Analytics or HowSocial to get a basic feel for how your content is being consumed.  Two key Google Analytics metrics to monitor are traffic sources and key words.  Understanding how people are accessing your content and the search terms they are using is critical to formulating content and key words.  For example, referrals from people or sites you consider to being influencers in your space is an important trend to understand so you can reinforce it to build even more traffic.  Keyword trends are also critical.  Keywords are the primary way people search the Web today.  While this may change with the advent of the ‘semantic web’ for now understanding how people search and where they go is critical to building awareness amongst your target audience.  You also need to monitor your corporate website to see how much traffic you are driving to it and where the traffic is going.

Every two weeks you should put together a summary of key metrics, trends, and learnings.  What posts generated the most interest?, how many folks became actual prospects?, what posts were the least successful?  The goal here is to use some basic, quick to pull together stats to assess your progress.  The primary metric you are trying to grow is the number of visitors/readers/subscribers who are NOT your customers.  These are the folks you are trying to condition and influence at the end of the day.  A secondary metric is the number of existing customers.  This metric will demonstrate the relative level of web engagement with your customers

Free tools, however, have limitations.  If you really want to understand the digital body language of your visitors you need to invest in a modern marketing management system like those offered by Eloqua, Manticore, SilverPop, or LoopFuse.  These solutions provide the functionality and work flow management that is required to track and action prospects based upon their digital body language.

Best and Worst Industries of Decade, or, Why Children’s Clothes Makers Need to Get Into VoIP.  Paul Kedrosky, Infectious Greed

Stealth Startups, Get Over Yourselves: Nobody Cares About Your Secrets.  Vivek Wadhwa, via TechCrunch

The Startup Visa And Why The Xenophobes Need To Go Back Into Their Caves.  Vivek Wadhwa, via TechCrunch

Rangel Puts Carried Interest Back On The Agenda.  Wall Street Journal Private Equity Beat

Memo to Congress.  There are legal issues with taxing carried interest as ordinary income.  Paul Koenig, peHub

15 Google-y Perks That Will Make You Jealous.  Nicholas Carlson, Silicon Valley Insider

Why Don’t Fortune 100 CEOs Care About Social Media?, JCM at SpataillyRelevant.org

Disney’s four funnels.  Forget fairy dust. M&A in the Magic Kingdom is all about process.  Richard Morgan, TheDeal.com

Barack Obama Has Better Things to Do Than Tweet.  Ryan Tate, Valleywag

Sometimes Twitter Accounts About Sh*t Your Dad Says Get You TV Deals.  MG Seigler, TechCrunch

Things VCs Never Say . . .

The details and an assessment of the initial lawsuit were covered in an earlier post entitled “Suing Gartner Won’t Solve Your Magic Quadrant Problems.”  Basically, ZL Technologies got fed up of being binned in the ‘Niche’ quadrant year after year.  ZL Technologies has been in business for 10 years and included in the MQ since 2005.  After being pigeon-holed in the ‘Niche’ quadrant for the fifth year in a row, ZL Technologies decided that Gartner and their analyst Carolyn DiCenzo were so biased against them that their only recourse was to sue Gartner.  ZL made seven claims against Gartner in their original lawsuit.  These included defamation of character, false statements about Gartner’s products/services, and false statements about Symantec under the Lanham Act, as well as false advertising, unfair competition, and negligent interference with prospective economic advantage under the California Business and Professions Code.  After the initial lawsuit was filed, Gartner filed a motion to dismiss.  A hearing was held on October 23^rd and on November 4^th the Court ruled in Gartner’s favor on all claims.  As noted in the order:

“This Court declines ZL’s invitation to expand the principles of Lanham Act standing beyond those recognized by the Ninth Circuit.  Finally, even if the Court were to apply the prudential standing approach, ZL fails to explain in its opposition how its allegations of fact support the first statutory factor – that the alleged injury “is the injury of a type that Congress sought to redress in providing a private remedy for violations of the Lanham Act.” Phoenix of Broward, 489 F.3d at 1163-64, citing Conte Bros. Automotive, Inc., 165 F.3d at 233.2. . . . ZL asserts six additional claims under California law. Each claim is dependent upon a conclusion that the Alleged Defamatory Statements are false or misleading statements of fact.  Because it concludes that all of the statements are non-actionable opinions, the Court will grant the motion to dismiss as to each of the claims.”

The Court also noted:

“As discussed at length above, the Court concludes that the Alleged Defamatory Statements as such are non-actionable statements of opinion, and obviously no amendment can change the statements themselves. Other courts have denied leave to amend under similar circumstances, concluding that amendment would be futile. Partington, 56 F.3d at 1162 (affirming the district court’s dismissal without leave to amend of defamation and false light claims when the alleged defamatory statements were held to be nonactionable opinions protected by the First Amendment); Browne, 525 F.Supp.2d at 1255 (dismissing plaintiff’s claims of defamation and libel without leave to amend after concluding that defendant’s evaluative rankings were non-actionable opinions protected by the First Amendment). Because the statements are at the core of all of ZL’s claims, it appears very unlikely that even additional allegations of bias will enable ZL to state a viable claim, particularly given the fact that even under the liberal pleading standard of Fed. R. Civ. P. 8(a) a claim must be “plausible on its face,” Twombly, 550 U.S. at 570 (2007), see also Iqbal v. Aschroft, __ U.S. __, 129 S.Ct. 1937, 1950-53 (2009), and in light of the constraints imposed by33 Fed. R. Civ. P. 11. However, in keeping with the strong policy in the Ninth Circuit favoring amendment, leave to amend in part will be granted here.” (emphasis added)

The Court did throw ZL a bone, however.  In Gartner’s motion to dismiss, they asked the court to dismiss the claims with prejudice and to not allow ZL to amend their original complaint so they could get a second bite at the litigation apple.  During oral arguments at the October 23^rd hearing, ZL’s attorney raised some new points that the Court considered:

“ZL contends that through its “continuing investigation” it has discovered facts that lend further support to the allegations in the complaint. Opp. MTD at 25, n. 7. In particular, ZL claims that “a former board member of Gartner was also, until very recently, a board member of Symantec, and also…a co-founder of a significant Gartner shareholder” that according to a recent SEC filing by Gartner “‘may be able to exercise significant influence over matters’ of significant importance at Gartner.” Id. ZL also purports to have discovered that Gartner maintains business relationships with at least some of the IT companies that it rates in its MQ Report, “some of whom pay Gartner hundreds of thousands of dollars per year for Gartner services, promotion, and participation in Gartner trade shows.”

The Court allowed ZL to amend their complaint, but noted an important caveat:

“Because the Court can discern no way in which additional factual allegations could cure the deficiencies in ZL’s claims under the UCL or FAL or for negligent interference with prospective business advantage, leave to amend will be denied as to these claims.”

In summary, the Court ruled that the ZL suit was without merit and had no chance of succeeding.  They left open the door that if ZL could prove some crazy conspiracy theory about how Gartner was really out to get them they might be able to amend their initial lawsuit and actually make it into court.

It will be interesting to see if ZL tries to take this lawsuit any further than they already have.  As the Court noted several times there is practically no chance that ZL could prevail on any of the claims they have made.  It was good to see how Gartner backed their analyst, Carolyn DiCenzo.  It is never a positive thing to be sued individually as a result of your work but it was gratifying to see Gartner mount a robust and successful defense on her behalf. 

At the end of the day I am pretty sure ZL Technologies is no better off than where they were before they decided to sue Gartner.  Certainly they have had a chance to air their grievances in a public forum and they have generated some sympathy from other vendors and pundits who share their views about the evil Gartner.  The facts behind Gartner’s fundamental assertion in the MQ that ““ZL is primarily a product and engineering-focused company. To remain viable vendor in the market, the company must gain greater visibility and more aggressively expand its sales channels” have not changed.  Technical prowess only carries an enterprise software vendor so far.  Marketing and sales execution are the key drivers to revenue growth.  As I noted in my prior post on this topic, ZL would have been better served to invest the $300,000 to $500,000 they probably spent on this lawsuit hiring away one of Symantec’s top sales people.  Alternatively they could consider the advice from Jon Gatrell, a veteran product management executive who has a tremendous track record of moving from being a Niche to a Leader in Gartner’s Magic Quadrant.  Here are a few suggestions from Jon:

Online reputation management is important in today’s job market.  As the WSJ’s Sarah Needleman noted in a recent piece:

“Indeed, people trolling for jobs on Twitter need to tweet with care—not just when they’re interacting with employers, says Cynthia Shapiro, a former human-resources executive and career coach in Woodland Hills, Calif. Hiring managers could use information they find on Twitter, just as on Facebook, to form opinions about an applicant’s employability. People sometimes disclose personal things over Twitter, like work-family challenges, that an employer couldn’t ask about in an interview but which might color their impression if they knew. For example, if an employer sees on Twitter that a candidate is going through a messy divorce, they might “assume you’re going to be distracted,” Ms. Shapiro says.”

An infamous case of bad Tweeting costing someone a job is CiscoFatty.com.  Ciscofatty.com was a spoof website setup to monetize the Twitter faux pas of a college grad who posted something incredibly stupid in the middle of the worst of the current recession:

“A recent tweet by one would-be Cisco employee proves that when it comes to placing a permanent black mark on your resume via the Internet, Twitter is now the tool of choice. To illustrate, here’s the tweet the now Web-infamous “theconnor” shared with the world:

“Cisco just offered me a job! Now I have to weigh the utility of a fatty paycheck against the daily commute to San Jose and hating the work.”

It wasn’t long before Tim Levad, a “channel partner advocate” for Cisco Alert, shared this open response:

“Who is the hiring manager. I’m sure they would love to know that you will hate the work. We here at Cisco are versed in the web.”

It turns out that “theconnor” was 22 year old Connor Riley.  And yes she did not get the job at Cisco.  In the course of the ensuing Internet fallout she was ungraciously labeled ‘CiscoFatty’.  In an interview with MSBNC’s Helen Popkin she explains why she tweeted what she did and how she attempted to recover from the incident.  Riley has subsequently deleted her Twitter account as well as her personal blog where she used a post entitled “Dear Internet Super Heroes” in an attempt to explain her side of the story. 

Social media reputation cleanup sites like ReputationDefender.com or Wisk-IT are fairly limited in what they can do to clean up your social media gaffes.  Generally, for a monthly or annual fee they will provide you with services to monitor your social media presence.  In the event you need to clean something up they will help you contact the publisher or website owner and nicely ask them to take down the offending material.  They can also help you correct inaccurate information, such as Google publishing your unlisted home phone number.  In the event that the nice approach doesn’t work, they can help you ‘bury’ the offending item by creating multiple posts, comments, or Tweets so that when someone does search you the offensive item is buried deep within the search results.

It is still kind of cool to see regular consumer brands crossing over into the social media world in creative ways like Wisk.  Perhaps some other brands could create similar services to leverage their brand power in an effort to help folks recover from social media faux pas.  Here are a few ideas to consider:

Ivory Soap.  A service to wash out vulgarity from your children’s Facebook posts and Tweets.  Kind of like virtually washing out their mouths with soap when you cussed as a child.

Clorox.  Get rid of that nasty Internet DNA that lingers around forever when you post pictures and blog extensively about that ‘Lost Weekend’.

Preparation H.  It automatically de-friends and un-follows people you would consider to be ***holes.

LegalZoom.com.  Automatically generates, serves, and enforces restraining orders against Internet stalkers.

Mary Kay Cosmetics.  Automatically finds every picture of you on the Internet and touches them up to ensure that you always look the best.

Dyson Vacuums.  Powerful to suck up all those nasty sucks.com domains (walmartsucks.com, microsoftsucks.com. parishiltonsucks.com, etc.) that are giving you heartburn while never losing suction. 

Feel free to add your own ideas in the comments.

As TechCrunch’s MG Siegler noted in his post on the presentation:

“Meeker thinks we’re in a new computing cycle with the mobile web. Meeker believes Apple’s iPhone and iPod touch are leading the way here, big time. She thinks the mobile web will be 10 times as big as the more traditional desktop Internet, and that it will grow much faster.

She also notes that the technologies around it are exploding: Wi-Fi, GPS, 3G, Bluetooth, etc. And all of this is exploding in a recession, she notes.

Other key points:

• Location-based services are the “secret sauce” of what makes the mobile web interesting.
• The iPhone/iPod touch is the fastest growing piece of hardware the world has ever seen.
• And usage share versus market share of the iPhone is incredible, meaning it will only grow.
• Facebook is becoming the multimedia repository, and it will allow you to do so much.
• Companies absolutely need to be on board with the mobile web. They have some time, but they need to act.”

Mary identifies 8 key themes that describe the mobile Internet opportunity:

The entire presentation is embedded below.  Additionally, a copy of Mary’s presentation from March 2009 is included as well.

 For comparison purposes, here is Mary’s presentation from March of this year.

Last week Boston Globe blogger Scott Kirsner reported that programmer Craig Spitzkoff was able to sell his side project JobVent to Benchmark Capital backed Glassdoor for around $100,000.  According to Kirsner “last June, he mentioned on his blog that JobVent was for sale, and he sent out a tweet to his 185 followers on Twitter. “Found a few semi-interested parties,” he tweeted a few days later, “but nothing serious yet.” Later in June, he was “Skyping with a potential European JobVent.com suitor.” By July, the deal had closed.”

Now two small deals does not make a trend, but I’m sure that other small tech companies looking for some type of exit will try and leverage Tinkoff and JobVent’s experience.  Today, there are over 300,000 tweets on Twitter that carry either the #4sale or #forsale hashtag.  How long before we start seeing #Ineedanexit?

TechCrunch’s Robin Wauters does a good job dissecting the information:

“Meetup , a web service that enables people to organize and manage real life get-togethers, has proven to be a popular tool that people are willing to pay for. TechCrunch has obtained a slide deck that the company used for an August 2009 shareholder update, revealing its current financial situation and past revenue forecasts. The document shows the New York-based company is performing well, having reported its first (mildly) profitable month last July.

Financial results actually fell short of forecasts put forward last year, when Meetup aimed for 50% growth in both meetups and revenues by this Summer. Despite the fact that growth was actually more like 35-40% over 2008 in its main metrics, Meetup (unexpectedly) hit profitability last July on net income of $30,000.”

The Meetup team is to be sincerely congratulated on these results.  They have created and scaled a service that professional and amateur meeting organizers find useful and valuable enough to pay real money for — no mean feat in today’s world of free and freemium businesses.  It’s interesting to see how Meetup’s business has developed over the past few years.

Meetup has had solid revenue growth.  It’s nice to see the chart move up and to the right each quarter:

The documents also provide a snapshot of some key July 2009 metrics:

A couple of interesting points.  Revenue was up 39% year over year driven by what appears to almost a lock step increase in Successful Meeting Groups (aka SMUGS).  The $166K improvement in net income was due to higher revenues and expenses growing at a significantly slower rate than revenues.  The annualized revenue per employee metric shows an average 20% increase year over year.  Basically the employees were able to deliver a lot more revenue in a much more productive manner in 2009 than 2008.  The average monthly revenue per SMUG is unusual, it’s $28/month/SMUG and was basically flat year over year.  With 27,000+ customers there is actually a lot of variability in monthly revenues.  Not all SMUGs only average $28/month.  You have to take a look at how the customers tier out and what the monthly flux is in the customer base.  For some more information check out SaaS Revenue Primer: Flux Analysis.

Based on the $776K revenues in July 2009 TechCrunch estimated that Meetup had a $9.2 million annual run rate.  A closer look at the numbers indicates that Meetup is probably more on track to do about $8.3 million.

Take a look at the following summary table:

Like all SaaS businesses, Meetup has some seasonality in their numbers.  While quarterly revenues have been steadily growing, the growth rate from one quarter to the next has varied significantly.  Additionally, as Meetup’s total revenues have grown, their year over year growth rate has continued to decline.  Sometimes it’s easier to see these relationships in a graph.  For example, the following graph shows how much Meetup’s revenues increased each quarter since Q3 2006:

As you can see, the first quarter of the year tends to be the strongest growth quarter for Meetup, with Q4 being the worst.  There was some anomaly in Meetup’s business between the first and second quarter of 2008 when revenues were basically flat.  Some other bloggers have pointed out that in 2008 Meetup powered a lot of election related events which accounted for a chunk of their growth.  But, Meetup has been able to sustain not only historical revenue levels, but grow revenues in 2009 so they are clearly not a ‘one-election-pony’. 

Another interesting trend is looking at how revenues grew on a year over year basis.  Take a look at the following:

This chart shows the relative growth and decline of Meetup’s revenue growth (not their quarterly revenues).  As the chart indicates, in 2008 Meetup’s revenues growth decelerated when comparing 2008 performance against 2007, but has begun to tick up in 2009.  My estimate of Meetup’s full 2009 revenues of $8.3 million is based on the assumption that they can continue to grow revenues sequentially at 29% in the second half of 2009.  While that is better than their historical trend has been it is not unreasonable to expect that an improving economy will lift Meetup’s revenues. 

Since Meetup has actual revenues and profits, it’s possible to come up with an estimated valuation for the company by looking at a few comparable companies.  Enterprise Value is the most common metric used to assess the value of companies.  Enterprise value is basically equal to the equity value of the company (market cap for public companies) minus cash plus debt.  For more info on calculating enterprise value check out this post.  A common valuation metric is the Enterprise Value/Revenue multiple.  EV/Revenue is simply the Enterprise Value of a company divided by its trailing twelve months revenues.  It basically says the value of a company is equal to so many years of the company’s revenues.  For example, a 2.5x EV/Revenue multiple implies that the company is worth about 2.6 years of its most recent revenues.  Take a look at the following table:

Typical boring software companies have relatively low EV/Revenue valuations – 1.0x to 2.5x.  High growth companies have much higher ones.  If we were to assume that Meetup will do about $8.3 million in revenues in 2009 and they would be valued, on a relative basis somewhere between Salesforce.com and Google, then their estimated enterprise value would be about $44 million dollars (Note that Meetup claims to have about $8 million left in the bank.)  If one were to value them at half of Facebook’s recent valuation they’d be worth a little over $115 million.  If you one of the lucky 57 employees at Meetup today your stock has been worth a lot before and has excellent prospects going forward.