September 2009 Archives

How do local businesses stay connected with their customers online? Some have their own websites, but how functional are they? How are they able to drive traffic? How do they compete with larger stores with greater capacities?

There really is no substitute for my local corner store, sandwich place, pizza shop, or nail salon! They know me by name, ask me how my day is (they know what I actually do!), and genuinely seem to care.  

It's a great first step to have a website, but how do local businesses optimize the Internet's potential to reach out to the community, expand their clientele and stay competitive against giants such as Wal-Mart?  Now, I'm not opposed to big business (I like a bargain as much as the next person), but I also LOVE my local spots and want them to be up-to-date with technology so I can get the convenience as well.

One company that is assisting our locals is MerchantCircle. They are the fastest growing and largest online network of local business owners in the country. Founded less than 3 years ago, MerchantCircle is also in the top 10 out of the 150 fastest growing US websites.

MerchantCircle's goal is to help local businesses get more customers quickly, easily, and cost-effectively. They currently have more than 900,000 businesses using their services. MerchantCircle has "developed local business social network where business owners can promote their business by uploading pictures, writing blogs, publicizing events, creating coupons and newsletters, and connecting with other merchants, all for free."

Other online companies serving small businesses include:

Redbeacon - this top winner at this year's TechCrunch50 is a service that allows your local customers to "Compare prices and book an appointment" at their local establishments.

Workstir - This service will help your customers find you based on the services you provide and the reviews you receive.

Geolocal - Helps your local business to generate local leads.

So with all that in mind, here are my 5 Tips for small local businesses to gain an online presence:

1. When setting up a website, try to utilize search engine tools - nothing is worse than wanting to find basic info (hours of operation, phone number, etc) and not being able to find the information on Google!! Some great tips can be found at these blogs: Small Business SEO: How To Launch That Web site By Lisa Barone and Before You Launch that Local Small Business Website, by Rae Hoffman. 
2. Depending on the service - allow people to buy products/set up appointments online for those of us who don't always have time to make calls or stop buy during the work day.
3. Try to build a community - add a fan page on Facebook, get people to review you on Yelp, write a blog about your services/products.
4. Increase your revenue potential by selling ad space on your web site - to keep you rolling in dough to stay competitive against bigger chains.
5. Use sites such as MerchantCircle to enhance and supplement your services. This will keep you up-to-date and stay in the online spotlight for your local customers. 

If you're interested in being a part of these companies making an impact in local communities, check out our current opportunities.

Last night (September 15, 2009) the MIT/Stanford VLAB hosted another sold out event, AI: Rise of the Machines, at Stanford.

The focus of the event was how businesses are adopting AI-based applications to...der der der....replace us humans!!! Sounds like the prelude to the Matrix (or Terminator for us who are more old school)!

The panel was moderated by Sven Strohband (Partner, MDV), and the panelists included:

• Dag Kittlaus (Co-founder & COE, Siri)
• Paul Rhodes (CEO, Evolved Machines)
• Steve Cousins (President & CEO, Willow Garage)
• George John (CEO, Rocket Fuel, Inc)
• Rob Haitani, (CPO, Vitamin D)

One of the coolest products on the panel, for me, was Siri. Siri's application is the equivalent to having a virtual assistant. Siri is available as an iPhone app and you just tell it what to do and it gets it done. Siri believes that "Virtual Personal Assistants (VPAs) represent the next generation interaction paradigm for the Internet." As opposed to just old fashioned scheduling and manual planning you are interacting and conversing with your devices. The technology behind VPAs "corresponds to the essential qualities of an assistant: conversational interface, brokering to multiple services, and personal context awareness," according to Siri website.

The core of this idea sprouted from the SRI's CALO (Cognitive Assistant that Learns and Organizes) project, who claim to be "leading the development of new software that could revolutionize how computers support decision-makers." CALO's sole goal is to create a VPA. Attendees of this event got a cool demo from Siri's CEO, Dag Kittlaus, who gave great insight to the product and his take on the future of AI and stated how "the definition of AI means different thing to different people."

The entire panel was very involved in what and how AI will shape technological advance for the present and the future, and this is defiantly a space to pay close attention to! 

I discovered a recent publication outlining the demographic and sociological make-up of the average Entrepreneur and how it may differ from what most of us identify as the "typical" stereotype. The publication is The Anatomy of an Entrepreneur: Family Background and Motivation (July 2009, Vivek Wadhwa, et al.). They interviewed 549 company founders and asked probing question to try and discover why and how people end up starting their own businesses, in hopes of discovering how to harness and cultivate this trait to create new businesses. 

The stereotype seems to be the young, single, very intelligent, fresh out of college workaholic, who came up with something in the computer science sector (which I believe holds true for the Silicon Valley entrepreneurs). However, despite computer hardware and software still being the largest industry in this report, the dynamic make of the average entrepreneur was a bit skewed to what you may otherwise have perceived. 

Top 10 Factors that give you a better shot at being a successful Entrepreneur:

1. You are married with 3 kids ... wow maybe some people can do it all!
2. You were in the top percentiles in high school .. smarty pants! 
3. You pursued higher education ... that's why they tell you to stay in school kids!
4. You are from a middle-class family ... even the average Joe can get in on the action.
5. You are better educated than your parents ... that's unfortunate for your kids!!
6. You have likely worked for an employer for about 6 years before launching your own start-up ... working for the man.
7. You are the middle child ... see its not all bad being that kid.
8. You are the first in your family to start a business ... expect to employ your siblings.
9. You were born in the USA ... lets get populating people! 
10. You began the start-up to build wealth, own your own company, and to capitalize on a business idea you came up with ... all good reasons in my book.

So I guess the point of it all is that if you have a great idea, with the determination and drive to see it through (it probably also helps to live in the valley) then you can make it happen. I mean if a 'mature', parent of 3, regular geek, with a bunch of student loans can do it - so can you J   

fbFund:

Unless you've been living under a rock for the past 5 years, you're aware that Facebook is one of the most successful startups Silicon Valley and they have one of the most active developer communities using their platform-- as seen by the number of apps and their heavily attended F8 conference. 

In the summer of 2008, Facebook began awarding seed rounds of $25-100K and mentorship to promising developers on the Facebook platform under the name fbFund, a joint venture with Accel Partners and The Founder's Fund.  This summer, fbFund announced that for this third round, it would be bringing all the companies to work together for 12 weeks at the former Facebook offices in downtown Palo Alto. 

On Tuesday's demo day, Facebook COO Sheryl Sandberg explained, "We brought people together "IRL" (In Real Life)...so people could really work together and Innovate."  

The idea of bringing stellar seedling companies together to work from the same place is no new concept. It's one that has brought Paul Graham and Jessica Livingston of Y-Combinator much success and many top investors are latching on, seeing this as an opportunity to get in early on new innovations.  fbFund REV's top dog, Dave McClure mentioned in his opening remarks that he even stole as much from these previous successes (like Y-Combinator and Boulder/Boston based TechStars) that he could get away with.  

Because it "takes a village" to build a company, much of the success of fbFund comes from their relationships with mentors who help to select and make investments as well as work directly with these companies by building up their teams and advising on product.  They featured talks from experts like BJ Fogg, Eric Ries and Tim Ferris  

In addition to mentoring the companies, fbFund also kept to the social incubator environment by drawing on many of Stanford University's Institute of Design practices where everyone worked in an open space and collaborated on the same whiteboards.  It provided an interruptive environment serving to get people out of their comfort zone while fostering communication and collaboration. 

REV:

So what is REV?  REV first and foremost stands for revolution, the social revolution that the Facebook platform has started, allowing developers to utilize and individuals "social graph" in ways most people could have never imagined.   But REV is more than just that- it stands for REVise.  Forcing companies to make constant iterations on their products.  To get a minimum viable product out the door and then look at metrics to make decisions based on numbers and A/B testing.  REV stands for REV the Engine and go faster!  As McClure said, "If you don't feel like you're out of control, you're not going fast enough."  Companies aren't built in years anymore, they're built in weeks or months.  You've got to act fast and get to market to succeed in this landscape.  And finally, REV stands for REVenue.   fbFund is happy to boast that of the companies involved this summer, 5 of them are currently profitable or breaking even with another 3 expecting to by end of year.  Profitable companies even wore special "REVenue is Sexy" t-shirts for the event. 

The Companies:

I first want to say that having seen the companies grow over the entire 12 weeks, and watched these presentations several times, that ALL of the companies had phenomenal improvement on not only their products, but in their ability to clearly communicate their products to potential investors.  So everyone deserves a huge BRAVO!!!!

Now, I get a chance to be a tiny bit biased.  Instead of an overview of each and every company, I decided to keep it to my top 5.   

1. Zimride-  Finally a company that is solving the carpooling mess at universities AND making money!  Website is simple and easy to use and it saves money and the environment by solving a real problem in the real world.  Plus, they've forged a partnership with car-sharing company Zipcar.  

2. GroupCard -> Cash.io-  GroupCard wins my award for most transformed by a mile!  

When I first saw the presentation for Groupcard, I thought it was cool enough, but didn't really stand out enough to make it long term.  It's a cute idea, people can pass around a virtual card online and even print it out if they want.  They were making money, great.  They had lots of users, awesome.  It just didn't have the staying power.  Then, they announced that over the course of this incubator, their company had taken a new direction and had a new focus.  Interactive gifts.  They have built a platform that allows business to issue codes to send money to consumers using PayPal. This changes the world of social marketing, business gifting and rebates. 

3. Runmyerrand-  I enjoy Runmyerrand because it solves a problem that we experience in the real world, which is "when am I going to find the time to do ____?"  Runmyerrand is great for metropolitan areas where sometimes its just not convenient to walk a bag of clothes to the donation center 11 blocks away.  I'm excited for their expansion to other cities.  Also awesome to have another Zipcar connection, Runmyerrand was incubated out of the Zipcar headquarters in Boston.  

4. Samasource- OK, so Samasource is a non-profit, but I was so moved by the impact that they are able to have on the people they train and put to work, I had to include them.  Samasource connects people living in poverty to computer based micro tasks.  Not only do they find companies willing to outsource their QA or computer based tasks, but they have also facilitated training and set up tech centers where the work can be completed.  Their slogan "Give work, not aid" really stood out as an amazing innovation and a great way for those of us here in Silicon Valley to help.  Please be sure to check out the website and maybe even make a donation!

5. Thread (FKA Frintro)- So I'm not currently on the market, but if I was, I'd probably use Thread.  They're right about dating sites being less than desirable and the best people to date are always friends of friends. What a great way to take what people are ALREADY doing on Facebook and find a way to build an app around it. 

If you are an entrepreneur interested in becoming a future Co-Founder or early startup employee, be sure to contact techVenture and become a part of our Co-Founders Network. 

cofounder@techventure.com