Consultiq

Google Sites Lead the Pack in Online Video Content for January

0 | February 21st, 2012 | Posted in internet marketing

Video content sites run by Google clocked the highest number of unique visitors in January, according to comScore.

Using Your Corporate Blog to Amplify Your Presence

0 | February 15th, 2012 | Posted in internet marketing

You’ve got your website, corporate blog, all the requisite social media presences, but audience growth is slow. How to jump start growth and get your message out? They key is effective content creation for your blog.
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When Users Are Your Product

0 | February 10th, 2012 | Posted in business strategy, international trade, social ventures, Uncategorized

Jisnu Menon, counsel for the Mozilla Foundation, noted on February 3, 2012 that many major ventures like Google, Yahoo, Facebook, and Twitter have revenue models based on generation of cash through advertising and lead generation. In essence, their users have become the very product they sell.

He was speaking on Social Network Privacy at Connect: Social media as a Platform for Innovation and Collaboration, an informative program jointly sponsored by Fenwick & West LLP and the University of California-Davis School of Law.

Menon went on to ask some troubling and overarching questions, “When the users are your product, who owns them? What rights do they have? What rights have they surrendered? Who has responsibility for their data?”

Now, there’s no doubt whatsoever in those companies’ minds that they own the rights to their proprietary understanding of their customers, yet Menon and others pointed out that there is no basis in law for that belief. Remember, throughout the long history of copyright, the intellectual property of others remains the creator’s sole possession unless they grant property use rights or transfer them to others. It could be persuasively argued that users have not performed that vital step.

The panel also discussed whether an organization’s terms and conditions of use empowered it to assert ownership in a user’s segmented interests, behavior, or other attributes and whether an explicit opt-in or opt-out might affect whether a user was severed from his or her property. The matter apparently has not been around long enough for the law to catch up with business practice.

Dean Kevin Johnson and Professor Anupam Chander of UCD School of Law had earlier provided citations that demonstrate pretty conclusively that ad-supported social network organizations such as those named above could not have been born nor grown in the European Community, for instance, where privacy law is much less forgiving than under the U.S.A.’s safe harbor provisions dating to the mid 1990s. Later in the session, we heard that the EC has regulatory proposals underway that might make it very difficult for those very organizations to conduct business in Europe as they do today.

These are questions worth pondering as Facebook lumbers at a quickening pace towards what has been described as its $100 billion IPO. But it doesn’t stop with Facebook.

Many scrapers and other data collection/amalgamation companies currently practice digital voyeurism by sending web crawlers around these social networks to glom onto factoids about individuals. When they have done their work well, a profile of individuals emerges that, in turn, is monetarized by sale of data records and advertising. Is that fair use? Judging by the cease-and-desist objections and court cases being filed, the primary social sites don’t think so—they assert their ownership to their users’ data. But the question remains: what is the basis of their claim of ownership? It isn’t rooted in simple possession.

All of this may come to a conclusion if a jury in an action addressing this point creates a precedent one way or the other. Until then, all of the legal opinions in the world and all of the regulatory trial balloons in scores of capitols are insufficient to assure the Facebooks and Googles of the world that they are not skating on thin ice over a very deep and cold pond.

Bob Dolezal—Consultiq CEO

Consultiq Launches Bay Area Startup Directory

0 | February 9th, 2012 | Posted in Consultiq, internet marketing

We have launched our own Bay Area Startup Directory to help early-stage companies gain visibility.
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A Tale of Two Cities in the Golden West

0 | February 8th, 2012 | Posted in cleantech, recommended reading, technology, venture capital

Two reports emerged today (February 8, 2012) that contrast the difference between tech in Silicon Valley and clean tech in California’s capitol region, Sacramento. Everyone always wonders why you can’t recreate Silicon Valley elsewhere in the state. These reports provide some interesting insights about two regions of consequence to the state’s economy.

The 2012 Silicon Valley Index noted that the Silicon Valley region grew 42,000 jobs in 2011, up 4%, and it “enjoys” an unemployment rate of 8.3% compared to the statewide average of 10.9%. The Index also noted that per-capita incomes were rising again, after falling 3% between 2009 and 2010. Undoubtedly, the fuel for these feats stem from a 17% increase in venture capital spending, the third such showing in as many years.

The Sacramento region, long a strong player in state green-economy statistics, is another story. It’s clear that more than 120 miles separate the business climates of these two neighboring areas. After steady growth in green tech jobs from 1995 to 2010, Sacramento’s trend stalled when 2011 closed with 200 less employed than in the prior year, according to Next 10, a San Francisco nonprofit that tracks California’s clean and green economies.

Next 10 said that clean energy, agricultural technology, and other clean industry tech startups in the Sacramento area employed 14,500 in 2011, a drop of 1.4% compared to 2010. I guess it’s some consolation that the decline was roughly half that of the overall employment drop for Sacramento across all of its government, farming, industry and other job categories. It footnoted that 1,000 clean-tech companies now operate in Sacramento (up 72% since 1995, but down 9% since 2009).

Now, it’s a well-recognized conundrum that Silicon Valley’s investors hate to place their bets much beyond the core cities that range from Cupertino in the south to Marin in the north…heck, they even hate to drive over the Dumbarton, San Mateo, or Bay Bridges to attend board meetings at their client startups in the East Bay.

But it’s worth scratching one’s head to wonder if somewhere in Sacramento’s 1,000 or so clean tech companies—including a much narrower segment than Next 10′s classification that the Sacramento Area Regional Technology Alliance (SARTA) says earned $1.5 billion in revenue last year—there might be some worthwhile angel and venture capital investment opportunities. After all, SARTA also reported that the firms which earned that $1.5 billion more than doubled their sales since 2008. And, remarkably, they achieved those results for the most part without access to or investment by venture capital sources.

As I noted in the lead to this post, there’s a long history of discussion, study, and speculation as to why the Silicon Valley model doesn’t translate well beyond the confines of San Francisco Bay. These comparative statistics showing the disparity between Silicon Valley and Sacramento make a strong case that the root cause probably does not rest in a lack of Sacramento entrepreneurs willing to found and build quality, performing businesses despite sparse funding opportunities. If they are already accomplishing so much with so little, imagine what they might do if someone provided financial backing similar to Silicon Valley.

Bob Dolezal—Consultiq’s CEO

The Missing Start-Ups

0 | February 7th, 2012 | Posted in business strategy, Consultiq, recommended reading, technology, venture capital

Drive through downtown Palo Alto or Mountain View almost any evening and then try to tell me that the economy is dead. You’ll see a host of happy people on the street, restaurants and stores filled to overflowing, and you’ll likely also hear the sound of laughter and technobabble. So how surprising was it to learn that the pace of new business start-up formation is still 6.2% below prerecession levels, according to a recent report by the Saint Louis Federal Reserve Bank.

The Fed went on to hypothesize that start-up births may be low because many failing firms close down at year end, noting that 374,000 jobs were deducted from the January payroll report over the past three years due to this statistical fluke. But they were sufficiently alarmed to raise the issue.

The germane question is, are Bay Area high-tech start-ups following the trend, or are they charting their own separate path?

I’ve talked with a number of start-up founders over the past four months and conversed with many others who have their fingers on the pulse of entrepreneural business formation. No one I’ve spoken to expressed pessimism about the business climate as a bar to start-up launch. So what’s the deal? Are traditional small businesses in trouble while high-tech isn’t? Here are a few thoughts to consider.

One, most of the high-tech startups I’ve encountered are funding themselves modestly with personal money, that of friends or family, or in a more rarified group, with traditional small angel rounds. By modest, I mean less than $250K–and probably 50% or more are well under $100K. By comparison, non-tech start-ups are almost exclusively funded by personal money drawn from retirement funds, savings, or through funds borrowed on credit cards. (Traditional lending institutions have always been the last go-to for early business funding, and with today’s collateral and lending paradigm, that’s never been more true.) As we go into our fourth recessionary year (not officially, of course, but clearly well within the down cycle), personal financial resources have been sorely tapped for many would-be small business start-up founders. You simply can’t start a new business without some stake to sustain you and the fledgling company.

Two, many high-tech start-ups are mini-conglomerates of technical teams willing to work for sweat equity and forego income, at least for awhile. Other talent may defer compensation. That’s a workforce and talent path virtually closed to other small-business start-ups.

Three, high-tech start-ups have relatively short expected life cycles, with probably 90% having a lifetime of 10 years or less (at least to the point of reaching founder liquidity events). The remainder go IPO or have sustaining revenue and profits to drive them beyond the norm. In comparison, non-tech start-ups typically expect to continue operations indefintely, building their business as a permanent home for their founders. Anyone who has faced selling a small family business—profitable or not—knows the challenge of small-business liquidity first hand.

So, based on these observations, are high-tech start-ups fundamentally different than their other small-business counterparts? A qualified yes.

Are they immune from the issues faced by other small-business start-ups? A qualified no—provided that the pseudo Moore’s Law continues to apply to product-proving cost underwriting and makes it ever cheaper and faster to have an idea, build a product, and see if it catches the market’s attention.

But even post-success serial entrepreneurs have their fiscal limits. Should the pool of would-be founders with means dry up at some time in the near or distant future, high-tech start-ups will begin to more closely resemble the trend we now see firmly established for other small-business start-ups.

At least that’s how it looks to me.

Bob Dolezal—Consultiq CEO

Fourth Quarter U.S. Retail E-Commerce Spending Up 14 percent

0 | February 6th, 2012 | Posted in internet marketing

Today, comScore released its estimate of 2011 fourth quarter U.S. retail e-commerce spending, which was up 14 percent over a year ago at $49.7 billion.
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Boston Consulting Group Predicts a $4.2 trillion Internet Economy

0 | January 28th, 2012 | Posted in business strategy, internet marketing

The Boston Consulting Group is predicting a $4.2 trillion Internet Economy by 2016 for G-20 nations.
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Tagged in: BCG Digital Manifesto

Patience and Venture Funding

0 | January 26th, 2012 | Posted in business strategy, venture capital

Patience and persistence remain necessary attributes for successful entrepreneurs seeking venture capital funding, according to a 2008 paper titled, “Performance Persistence in Entrepreneurship,” (Gompers, Kovner, Lerner, and Scharfstein), available online from Harvard Business School.

Even seasoned serial entrepreneurs wait an average of 21 months before they obtain first-round funding compared to 37 months for first-time founders, the authors said. The paper provides a number of other useful comparative measures against which entrepreneurs may judge their performance.

While the paper did not indicate when the clock began to run on these funding timeframes, it’s clear that waits shy of two years to over three years are longer than many of the expectations I typically hear today from founders in my consulting practice, or that I heard when I was a founder in my own startup. They also contradict the “word on the street” voiced by many around Silicon Valley.

The stark reality of VC funding availability underscores the importance for founders in obtaining adequate early seed funding to sustain their venture’s operations until the venture matures sufficiently to gain VC investment support. On the flip side of that observation, it also means that getting to revenue and profit is a cornerstone attribute, and remaining in “development paralysis” to create the perfect product vehicle only delays the moment when VC funding will be forthcoming.

Despite these facts, many founders dawdle over their alpha and beta products’ features, nuances, and non-essential elements, trying to get them exactly right before finding customers, putting their product in front of them, and asking them to pay to buy it. What’s better: a venture with the perfect product that ran out of money before it obtained traction, or one with a minimally viable product that attracted paying customers and obtained the VC funding needed for product perfection and rapid growth?

Kicking off a startup is hard enough when the founders do everything right. It’s downright challenging when one chooses to ignore the history of others and charts one’s own path against track records typical of those found in the middle of the bell-shaped curve.

Bob Dolezal, CEO–Consultiq

Missing the Obvious

0 | January 23rd, 2012 | Posted in business strategy, recommended reading, venture capital

A whole book was written about so-called Black Swan events—blindsides that no one saw coming. Its message: “Besides anticipating the obvious, be prepared for things you never dreamed could possibly happen.” Real-world examples: The Japan and Indonesia quakes and tsunamis. The fiscal meltdown that caught Euro countries with their balance sheets in tatters. The cloud. Facebook’s dominance of social networking. And the list goes on.

Unanticipated events, challenges, and their consequences roil our everyday lives. Yet we are inexplicably blind to real threats to our ventures and livelihoods. In last week’s news headlines, we learn that Eastman Kodak, once a Fortune 10 market leader, fully anticipated the impact of digital imaging on its core business 20 or so years before the threat came to pass, yet failed to respond and adapt with meaningful change. It just filed for bankruptcy protection. Why?

A core reason is the inability to hear the market through the cone of silence and positive affirmation we managers erect in our leadership team, advisors, and company cultures. As founders of early startups frequently realize too late, the blind 500-lb. gorilla that is ignoring our market can suddenly surprise us with an overwhelming rifle-shot focused on our opportunity. Conversely, we fail to see, hear and anticipate what the consumers’ fickle tastes now want, what our key competitors are doing to thwart our expectations, or how business conditions have changed since we first hatched our ideas. We are too deep in our code, too busy crafting the perfect elevator pitch, too oblivious to early customer feedback, too blind to pivot when we desperately need to do so.

Looking over the horizon is an acquired skill. It’s not reading tea leaves, gazing at crystals, or reading the Tarot. It’s a never-ending quest to listen to and evaluate the views of those outside your inner circle, spanning wide ranges of expertise, skillsets, and subject areas tangental to your core interests. If you have your head down working in network infrastructure, you may be surprised to learn about developments in intellectual property or nano science that will rock your boat. If you have a shallow network, it’s a cinch that you’ll only be able to predict within a narrow window of perspective.

So what advice can I share? Take advantage of those panel discussions, meetups, networking events, beer-and-bull…. sessions—they’re held nearly every night of the week somewhere close to where you work, live, or commute. They are mainly low-cost, and they’re extremely valuable even if you only make a single new contact or hear a lone piece of information that fits into your picture. In many cases, you’ll gain several. And don’t limit your participation to groups in your narrow focus area. Take advantage of the opportunity to intersect your focus with other elements of the marketplace and triangulate to see possible paths the future might take. Then test your hypotheses by asking your network what they think. Build strengths on strengths.

Sure, you may be trying to finish your beta and pulling 18-hour days-nights. Or, you may be watching your run rate converge with your bank account hitting zero and trying desperately to raise a new round. How can you take time away from those things to rub elbows in a noisy bar or meeting room with a bunch of people interested in something you know nothing about? Well, ignore the advice at your own peril.

Whatever you are doing, look up, look out, and listen. There’s no need to be blindsided roadkill. You have a wide circle of advisors to expand your ability to see your possible futures from your single pair of eyes to their many. Ask.