Friday, August 17, 2007
Ka-ching for Beijing
China's maturing Web 2.0 industry is also an emerging VC hotbed, thanks to investors' desire to monetize growing Chinese social networks, blogs, wikis, and other Web 2.0 companies.
In fact, venture capitalists invested a whopping $200 million in growing Internet and information services firms in China during the second quarter, according to Forbes' new Acceleration: Global Venture Capital Insights Report 2007. That's *double* the amount China saw in the first quarter.
Further proof of the industry's maturation in China: Google's recent partnership with Sina, one of China's biggest Internet portals. Sina now uses Google China's search and advertising services on its portal.
Note, however, that companies receiving funding are in advanced stages of development. Many VCs burned by the dotcom burst now wait until later rounds to invest in companies, when there's greater certainty the company is financially stable and will do well in the market.
And as the Forbes report shows, VCs are investing in companies around the globe, looking for the safest and most promising returns, whether they be in China, India, or elsewhere.
So with so much VC attention on China, will American Web 2.0 companies face increased competition to secure VC dollars? Not if they take the right steps to promote their business plan.
The most important thing is to show VCs that your business is solid. Provide a clear report of your target markets and customers, marketing plans, and budget. Also show your product development road map with reasonable milestones and strategies for meeting them.
And don't forget the competition. Provide an overview of your competitive landscape, where you fall within it, and your plans to rise above competitors. Together, this information creates a comprehensive sales pitch to VCs, and helps secure the dollars you need to support and grow your business.
In fact, venture capitalists invested a whopping $200 million in growing Internet and information services firms in China during the second quarter, according to Forbes' new Acceleration: Global Venture Capital Insights Report 2007. That's *double* the amount China saw in the first quarter.
Further proof of the industry's maturation in China: Google's recent partnership with Sina, one of China's biggest Internet portals. Sina now uses Google China's search and advertising services on its portal.
Note, however, that companies receiving funding are in advanced stages of development. Many VCs burned by the dotcom burst now wait until later rounds to invest in companies, when there's greater certainty the company is financially stable and will do well in the market.
And as the Forbes report shows, VCs are investing in companies around the globe, looking for the safest and most promising returns, whether they be in China, India, or elsewhere.
So with so much VC attention on China, will American Web 2.0 companies face increased competition to secure VC dollars? Not if they take the right steps to promote their business plan.
The most important thing is to show VCs that your business is solid. Provide a clear report of your target markets and customers, marketing plans, and budget. Also show your product development road map with reasonable milestones and strategies for meeting them.
And don't forget the competition. Provide an overview of your competitive landscape, where you fall within it, and your plans to rise above competitors. Together, this information creates a comprehensive sales pitch to VCs, and helps secure the dollars you need to support and grow your business.
Labels: China, Forbes, VC, Web 2.0
Friday, August 10, 2007
Use reviews to increase views
Want to push your business ahead of the pack? Then draw on the strength of your customers' opinions.
That's according to e-consultancy and Bazaarvoice's Social Commerce Report 2007, which demonstrates the positive effect of customer product reviews on conversion rates, site traffic, and average order values at e-commerce sites. Other benefits include improved retention and loyalty, and improved search engine optimization.
In addition, more than half of the 800 America and European online sellers surveyed consider user-generated content either extremely important or very important to company strategy over the next year.
So you'd think these companies would be falling over themselves to create channels for effective, efficient customer feedback, right? Wrong. Only 28 percent of these forward-thinking respondents actually use customer ratings and reviews.
Why the disconnect? One adoption barrier is companies' fear of negative reviews, a concern one-third of respondents hold. (This is the same fear, incidentally, that prompts many corporate blogs to monitor or block comments.)
Another potential barrier might be the company's actual product. The report says online reviews have the most impact for complex and high-ticket items, such as cars and electronics, that require significant buyer research and investment.
So, if the product is low-risk or low-investment, such as apparel or groceries, sellers might not consider structured customer reviews a viable part of their marketing mix.
That said, I still support inviting customer feedback and ratings. It increases an organization's transparency, and demonstrates levels of customer satisfaction and service. And in the end, this open, evident commitment to quality is what really grows the bottom line.
That's according to e-consultancy and Bazaarvoice's Social Commerce Report 2007, which demonstrates the positive effect of customer product reviews on conversion rates, site traffic, and average order values at e-commerce sites. Other benefits include improved retention and loyalty, and improved search engine optimization.
In addition, more than half of the 800 America and European online sellers surveyed consider user-generated content either extremely important or very important to company strategy over the next year.
So you'd think these companies would be falling over themselves to create channels for effective, efficient customer feedback, right? Wrong. Only 28 percent of these forward-thinking respondents actually use customer ratings and reviews.
Why the disconnect? One adoption barrier is companies' fear of negative reviews, a concern one-third of respondents hold. (This is the same fear, incidentally, that prompts many corporate blogs to monitor or block comments.)
Another potential barrier might be the company's actual product. The report says online reviews have the most impact for complex and high-ticket items, such as cars and electronics, that require significant buyer research and investment.
So, if the product is low-risk or low-investment, such as apparel or groceries, sellers might not consider structured customer reviews a viable part of their marketing mix.
That said, I still support inviting customer feedback and ratings. It increases an organization's transparency, and demonstrates levels of customer satisfaction and service. And in the end, this open, evident commitment to quality is what really grows the bottom line.
Labels: Bazaarvoice, Customer review, e-consultancy, eMarketer
Thursday, August 9, 2007
The world thinks the world of Web 2.0
Just this week, global Internet information provider comScore released a study revealing social networking's dramatic global expansion over the past year, especially among major social networking sites.
Here's what I found most interesting (in light of our recent Friendster post):
These figures are an important reminder for North American businesses to forego regional myopia, and remember the “world” part of World Wide Web. Tapping into an area's preferred social network -- rather than your preferred sites -- and reaching out to your intended audience on their turf increases your chances for connection.
Better yet, find out why these sites are more attractive to people in different regions. How do they use the sites? What features or benefits appeal to them? You can then use this insight into their style and usage preferences to further develop your online product or service.
The result: By expanding your digital worldview, you'll broaden your business's horizons, too.
Here's what I found most interesting (in light of our recent Friendster post):
"While attracting global users, specific social networks have a tendency to skew in popularity in different regions. For example, both MySpace.com (62 percent) and Facebook.com (68 percent) attract approximately two-thirds of their respective audiences from North America. That said, each has already amassed a large international visitor base and both appear poised to continue their global expansion. Bebo.com has a particularly strong grasp on Europe, attracting nearly 63 percent of its visitors from that region, while Orkut is firmly entrenched in Latin America (49 percent) and Asia-Pacific (43 percent). Friendster also attracts a significant proportion of its visitors (89 percent) from the Asia-Pacific region. Both Hi5.com and Tagged.com exhibit more balance in their respective visitor bases, drawing at least 8 percent from each of the five worldwide regions."
These figures are an important reminder for North American businesses to forego regional myopia, and remember the “world” part of World Wide Web. Tapping into an area's preferred social network -- rather than your preferred sites -- and reaching out to your intended audience on their turf increases your chances for connection.
Better yet, find out why these sites are more attractive to people in different regions. How do they use the sites? What features or benefits appeal to them? You can then use this insight into their style and usage preferences to further develop your online product or service.
The result: By expanding your digital worldview, you'll broaden your business's horizons, too.
Labels: comScore, Social Networking
Wednesday, August 8, 2007
Do you see a VC?
Heard this story before? Smart person gets idea for new widget. Person ropes in one or two other smart people. The smart team perfects amazing widget in garage on shoestring budget.
Then team starts free blog about widget. Other smart people take notice, and become widget devotees. News spreads. Widget sales soar. Original smart team retires obscenely rich.
This scenario, of course, is every Web 2.0 entrepreneur's dream. But it can also be a venture capitalist's nightmare, according to Fred Wilson writing in Social Computing Magazine.
Why? Because business development that used to require $20 million can now take as little as $60k to achieve the same results, thanks to cheaper, faster, and easier Web services and capabilities.
So what's a VC to do when business owners can run the show themselves? Wilson's answer: Wait for stage two of their growth. Sure, startup costs might be covered by cheap Web apps and free blog PR, but success leads to expansion.
And that means more staff, more customer service, more infrastructure, more advertising -- and a need for more capital. Wilson sums up the VC opportunity here:
On the flip side, business owners should factor expansion into their long-term business strategy, and consider VC funding for future rounds.
Hopeless entrepreneurial romantics need not fear; calling on VCs won't damage the company's original Cinderella story. Rather, it ensures the company has a reasonable chance for success at a point when DIY techniques can no longer sustain the growing enterprise.
Don't get me wrong, companies' original spirit and customer interaction should remain intact with blogs, forums, and a strong Web presence. But later-stage VC can give Web 2.0 widget-makers a leg-up in a competitive space, and grease the wheels for the next round of invention.
Then team starts free blog about widget. Other smart people take notice, and become widget devotees. News spreads. Widget sales soar. Original smart team retires obscenely rich.
This scenario, of course, is every Web 2.0 entrepreneur's dream. But it can also be a venture capitalist's nightmare, according to Fred Wilson writing in Social Computing Magazine.
Why? Because business development that used to require $20 million can now take as little as $60k to achieve the same results, thanks to cheaper, faster, and easier Web services and capabilities.
So what's a VC to do when business owners can run the show themselves? Wilson's answer: Wait for stage two of their growth. Sure, startup costs might be covered by cheap Web apps and free blog PR, but success leads to expansion.
And that means more staff, more customer service, more infrastructure, more advertising -- and a need for more capital. Wilson sums up the VC opportunity here:
"Venture capital still plays an important role in financing web entrepreneurs. But the need for capital comes later in the company formation process. And that is a very good thing for everyone involved. Because VCs can scale their capital (i.e. risk) exposure as the risk is mitigated from the opportunity. They can still get their $10mm per deal invested, but they will put less up at the start and more up later."
On the flip side, business owners should factor expansion into their long-term business strategy, and consider VC funding for future rounds.
Hopeless entrepreneurial romantics need not fear; calling on VCs won't damage the company's original Cinderella story. Rather, it ensures the company has a reasonable chance for success at a point when DIY techniques can no longer sustain the growing enterprise.
Don't get me wrong, companies' original spirit and customer interaction should remain intact with blogs, forums, and a strong Web presence. But later-stage VC can give Web 2.0 widget-makers a leg-up in a competitive space, and grease the wheels for the next round of invention.
Labels: Fred Wilson, Social Computing Magazine, VC
Wednesday, August 1, 2007
Giving voice to blog posts
First there was vox humana. Then came vox populi. Now we have vox post -- or voice posts -- unrolled last week on sites such as OhGizmo and Boing Boing.
But wait! you say. The concept sounds vaguely familiar. That's because voice posts aren't new. Odeo's Audioblogger service hit the scene a couple years ago and partnered with Google and Blogger, only to be laid to rest in November 2006.
Still, it was enough time to pique interest among forward-thinking bloggers. And now HP is resurrecting the technology as a marketing strategy.
You might also be thinking voice posts are podcasts by another name. Well, not quite. Voice posts consist mainly of voice recordings sent by mobile phone, and posted directly to blogs. Essentially, they are aural versions of traditional text posts, where authors speak their views instead of typing them.
Podcasts, on the other hand, are digital media files distributed via syndication feed, and available for download and playback. They often feature interviews and shows, which range in production value, length, and complexity.
Voice posts offer some unique benefits to experimental authors. Faithful blog audiences get to hear raw, unedited views expressed in their favorite bloggers' actual voices. This strengthens a personal connection to writer and content.
Plus, varying written and spoken formats add interest and texture to blog sites, and can attract a new subset of followers who prefer listening to reading.
Now the drawbacks. Some authors express themselves better through the keyboard than the recorder. And while blog posts aren't usually heavily edited, their publishing structure does let writers add some spit and polish before sending them into the great wide Web.
In contrast, off-the-cuff voice posts risk becoming rambling streams of consciousness, where the most cogent points are lost in the babble, rather than called out on the page.
That said, I think authors who apply basic blogging guidelines for readable text to voice posts will make the format work. These best practices include offering clear, concise information; calling out links; and providing interesting analysis for your audience.
If any of you already use voice posts on your business or personal blogs, let me know how it's working out. We welcome all dos, don'ts, and dohs you've discovered along the way.
But wait! you say. The concept sounds vaguely familiar. That's because voice posts aren't new. Odeo's Audioblogger service hit the scene a couple years ago and partnered with Google and Blogger, only to be laid to rest in November 2006.
Still, it was enough time to pique interest among forward-thinking bloggers. And now HP is resurrecting the technology as a marketing strategy.
You might also be thinking voice posts are podcasts by another name. Well, not quite. Voice posts consist mainly of voice recordings sent by mobile phone, and posted directly to blogs. Essentially, they are aural versions of traditional text posts, where authors speak their views instead of typing them.
Podcasts, on the other hand, are digital media files distributed via syndication feed, and available for download and playback. They often feature interviews and shows, which range in production value, length, and complexity.
Voice posts offer some unique benefits to experimental authors. Faithful blog audiences get to hear raw, unedited views expressed in their favorite bloggers' actual voices. This strengthens a personal connection to writer and content.
Plus, varying written and spoken formats add interest and texture to blog sites, and can attract a new subset of followers who prefer listening to reading.
Now the drawbacks. Some authors express themselves better through the keyboard than the recorder. And while blog posts aren't usually heavily edited, their publishing structure does let writers add some spit and polish before sending them into the great wide Web.
In contrast, off-the-cuff voice posts risk becoming rambling streams of consciousness, where the most cogent points are lost in the babble, rather than called out on the page.
That said, I think authors who apply basic blogging guidelines for readable text to voice posts will make the format work. These best practices include offering clear, concise information; calling out links; and providing interesting analysis for your audience.
If any of you already use voice posts on your business or personal blogs, let me know how it's working out. We welcome all dos, don'ts, and dohs you've discovered along the way.
Labels: Blog, Podcast, Voice posts
Tuesday, July 31, 2007
Advertisers: All signs point to the Web
Tech entrepreneur David Pitlyuk is learning the lessons of advertising the hard way -- by starting with newspaper ads.
He got zero leads from a $200 ad he placed in a few local Maryland papers. I'm not surprised. This approach only reaches local readers who happen to turn to that page of the paper. Plus, consumers don't really read the newspaper to research businesses and products.
Both challenges can be solved with -- you guessed it -- an online presence and online advertising. When people are looking for a product or service, the Web is by far the first place consumers hit, and for one simple reason: It puts a world of information at their fingertips.
Consumers can quickly and easily find what they're looking for with a few key stokes and mouse clicks. They can also complete the commerce cycle in one sitting -- research businesses, learn more about their products or services, select one, and make a purchase.
Plus, with online advertising tools such as pay-per-click and pay-per-call, the Web offers some of the most powerful and efficient ways to attract consumers to your business and Web site (as we've discussed before).
So my recommendation for Pitlyuk and any other businessperson looking to spread the word about their company: Refresh yourself on our words of wisdom, take to the Web, and let the cash register ring.
He got zero leads from a $200 ad he placed in a few local Maryland papers. I'm not surprised. This approach only reaches local readers who happen to turn to that page of the paper. Plus, consumers don't really read the newspaper to research businesses and products.
Both challenges can be solved with -- you guessed it -- an online presence and online advertising. When people are looking for a product or service, the Web is by far the first place consumers hit, and for one simple reason: It puts a world of information at their fingertips.
Consumers can quickly and easily find what they're looking for with a few key stokes and mouse clicks. They can also complete the commerce cycle in one sitting -- research businesses, learn more about their products or services, select one, and make a purchase.
Plus, with online advertising tools such as pay-per-click and pay-per-call, the Web offers some of the most powerful and efficient ways to attract consumers to your business and Web site (as we've discussed before).
So my recommendation for Pitlyuk and any other businessperson looking to spread the word about their company: Refresh yourself on our words of wisdom, take to the Web, and let the cash register ring.
Labels: Online advertising, Pay-per-click
Thursday, July 26, 2007
Put some fun in your features
I'm always talking about the ways Web 2.0 can help businesses. Well, the Miami Herald agrees with me, and backs it up with some pretty impressive numbers.
The article pulls examples from two major companies, Carnival Cruise Lines and Burger King. Both have zeroed in on Web 2.0 to reel in customers.
Side note: While these are examples from large corporations, you can certainly use similar Web 2.0 strategies on a smaller scale to reach your customers. Ok, now back to the juicy stuff!
Let's start with Carnival. After only two weeks, its Web site's new interactive features are already the company's strongest marketing tools.
One of the features, Funship Island, lets browsers get an up-close and personal tour of a Carnival cruise ship. It offers everything from a walk on the cruise deck -- realistic enough to make you seasick -- to a dizzying trip down the water slide.
The day it launched, Funship Island attracted more than 200,000 unique visitors, with many of them spending more than an hour on the site.
In addition, the new Carnival Connections page helps visitors plan a cruise for every event, from birthday parties to weddings. Carnival also set up a blog, which became so popular they scheduled a cruise exclusively for fans of the blog -- all 1 million of them.
But interactive Web 2.0 isn't just for luxury vacationers. Burger King created an interactive Web site feature that lets customers scan a picture and "Simpsonize" themselves. This shows them what they would look like as cartoon characters, and then helps them share their images with the social networking sphere.
In the first three days of Simpsonizeme.com's launch, the site received more than 16 million hits, and more than 700,000 photo uploads. In fact, visitors were uploading an average of three photos each, and spending about 12 minutes on the site at a time.
The bottom line: Entertaining Web 2.0 features -- from elaborate, interactive video demonstrations, to clean, simple blogs -- draw more eyes to your company's site, and engage people with your company name. It's a surefire way to ignite word of mouth, and encourage repeat visits.
The article pulls examples from two major companies, Carnival Cruise Lines and Burger King. Both have zeroed in on Web 2.0 to reel in customers.
Side note: While these are examples from large corporations, you can certainly use similar Web 2.0 strategies on a smaller scale to reach your customers. Ok, now back to the juicy stuff!
Let's start with Carnival. After only two weeks, its Web site's new interactive features are already the company's strongest marketing tools.
One of the features, Funship Island, lets browsers get an up-close and personal tour of a Carnival cruise ship. It offers everything from a walk on the cruise deck -- realistic enough to make you seasick -- to a dizzying trip down the water slide.
The day it launched, Funship Island attracted more than 200,000 unique visitors, with many of them spending more than an hour on the site.
In addition, the new Carnival Connections page helps visitors plan a cruise for every event, from birthday parties to weddings. Carnival also set up a blog, which became so popular they scheduled a cruise exclusively for fans of the blog -- all 1 million of them.
But interactive Web 2.0 isn't just for luxury vacationers. Burger King created an interactive Web site feature that lets customers scan a picture and "Simpsonize" themselves. This shows them what they would look like as cartoon characters, and then helps them share their images with the social networking sphere.
In the first three days of Simpsonizeme.com's launch, the site received more than 16 million hits, and more than 700,000 photo uploads. In fact, visitors were uploading an average of three photos each, and spending about 12 minutes on the site at a time.
The bottom line: Entertaining Web 2.0 features -- from elaborate, interactive video demonstrations, to clean, simple blogs -- draw more eyes to your company's site, and engage people with your company name. It's a surefire way to ignite word of mouth, and encourage repeat visits.
Labels: Burger King, Carnival Cruises, Miami Herald, Web 2.0
