Paul was referring to my long held belief that any startup should be able to describe what they do in three words (I actually think many can do it in two). This was part of my presentation at CapVenture last year "Honing Your Elevator Pitch." It is embedded below.
I have a little rule of thumb. If you are working with the press on a story you can expect the finished article to be about 80% correct. Nothing against reporters. They are working on tight deadlines in areas where they do not necessiarly have domain knowledge.
Urvakash Karkaria of the Atlanta Business Chronicle deserves some props. When he wrote the story on Half Off Depot's funding (sorry for the paywall) he got most of the facts right. The only mess up was the photo caption. The people in that photo were not really "my team." They are cofounders and coworkers. And the picture that I wanted them to use is more like the one below. It included the full team that was in the Atlanta office that day.
These are the folks, along with CEO Brian Conley who was out of town, that deserve the spotlight for getting Half Off Depot to where it is today.
Half Off Depot is an Atlanta based social commerce company. We enable merchants to harness the power of social media and the appeal of deal driven commerce to attract and retain customers. Half Off Depot currently operates in two markets. Atlanta and Knoxville. Our revenue run rate is more than $10 million annually. We just closed a $7 million Series A round led by Noro-Moseley Partners. I wrote the biggest check I have ever written as part of the deal.
I am running business development and sales. Employee 21. The short story is I am in charge of meeting some pretty aggressive revenue growth goals. We will get to the longer story later.
During my time at ATDC I have looked at thousands of startups. Since last Fall I have had conversations with a number of interesting Atlanta startups. Half Off Depot is one of the most promising. It's certainly the most promising that I can make go faster right now. Brian the CEO is a stand up guy. It is going to be great to work with Alan Taetle again.
I couldn't be more excited to be back in the game.
Nice top level summary of a really big and interesting space.
So big and interesting that Google, the company with the largest market cap, is the dog. Regardless I think Jim Crowley, the CEO of BuyWithMe, pretty much got it right when he told Crain's "There is room for six of seven large players as well as niche players."
But Google the underdog? How do you suppose they are going to change that? If I were Jim Crowley I know what my answer would be.
I am socially liberal. I know how to carry a gun. Have been hunting even. I drink alcohol. But encouraging the use of alcohol with guns as the email subject and headline does is not cute. It is irresponsible.
Managing hyper-growth is hard. Too many people coming on board too quick. Not enough control systems in place. I am sure the person that wrote this was trying to encourage opens and click thrus. But somebody somewhere within LivingSocial should have at least caught this and changed the headline or perhaps stopped the deal completely.
Spoken by a guy that once did a bizdev deal with Playboy and paid the price of learning how conversavtive people in the South can be.
This chart does a nice job of showing how local ad spending is expected to continue to shift online to move more in line with now people are spending their time.
The money quote was in the eMarketer Daily.
"The proliferation of online advertising channels over the past few years has made it easier for local businesses to transition ad dollars from pricier, traditional ad formats to cost-efficient interactive channels like social media, search and email marketing."
As online local marketing channels continue to grow and offline marketing channels contine to shrink it's a trend that is sure to continue.
eMarketer has a nice article out today about how advertising dollars are still not following online and mobile useage. It's nice but does not really do a good job of quantifying the online marketing opportunity. This chart, from a presentation by Mary Meeker last November does.
That's $50 billion dollars with a "B" as defined by the most renown Internet industy analyst on the planet. Here is Mary's (who left Morgan Stanley to join Kleiner Perkins Caufield & Byers as a partner) entire presentaton "Ten Questions Internet Execs Should Ask and Answer".
"We cracked that local ecommerce nut, and it’s a serious nut. There wasn’t even a good form of customer acuiqsition (sic) before the Internet, for local businesses. I mean, advertising on radio and in local newspapers was about spending money upfront, to buy exposure, and then cross your fingers."
I believe Mr. Mason is partially right. First of all I am not so sure that GroupOn is actually a customer acquisition play. But putting that aside for the moment there is a little more to this than meets the eye. The reality of the situation is that the options to buy advertising on local mediums such as radio and newspapers are rapidly diminishing. If you are a local merchant and want to advertise your offline options are going away.
Neighborhood papers that used to end up on your drive or in your mailbox? Gone.
Yellow pages? Straight from the porch to the recycling bin.
Classified ads? Craigslist is free and has much broader reach.
City newspapers? An expensive medium to begin with that now has diminishing readership and page count due in big part to the profit hit from the demise of classified ads.
The point being that most forms of local advertising that used to be available via traditional media are going away. Print publishing is in sharp decline. Terrestrial radio audience is flat at best and efficiency is challenging on a small budget.
So if you are the girl that used to own the bar that advertised in the local entertainment print weekly you have a big problem. Much fewer people are reading these things. You have no choice. You have to take your offline marketing effort online.
And that is what is driving the local ecommerce nut. All that money, and it is a lot, that used to be spent on local print needs to find a new home. Classified. Coupons. Display. Yellow pages. Each category is a large market. Add them all together and things get real serious. Serious to create the mother of all Internet wars.
About a year ago I postulated that social media marketing was going to become a much more direct response medium. That social would only grow to become as large a part of the marketing mix if CMOs could get the same type of performance that they could get from interactive in general. Social needs to be measurable, less expensive, and generate revenue.
While it does not immediately jump out, the big big difference is both conversion and revenue are becoming more important metrics. Conversion jumps from being the 8th most important metric being looked at to measure social media to the 2nd most important and revenue from 9th to 6th. Conversion is ahead of fans and followers as a metric.
Social media marketing measurement is moving toward the bottom line. It is a trend that will continue beyond 2011.
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The opinions expressed here are mine and mine alone (with the exception of comments by others of course). They do not represent the opinion or position of any other person or entity. All postings adhere to my personal values.
