After a long weekend focused on moving Half Off Depot's backend infrastructure over to a new platform I got a pleasant surprise this morning. Seems like the folks over at Blue Focus Marketing selected me as one of the top men in technology on twitter, something they call the Nifty50.
To be selected a guy has to work for a technology company and be a member of an executive team that is working to create create a culture of transparency and authenticity. I have no idea how I ended up on a list that includes Michael Dell and Craig Newmark. Thanks the folks over at Blue Focus and to anyone that had a hand in bringing me to their attention.
My take. It does not matter. Unless your startup has over 50% of the U.S. using it, has raised hundreds of millions of dollars in venture capital, went public at a $100 billion valuation, shrewdly maximized the money put in its coffers by pushing its IPO price to the limit, and you have somehow managed to remain CEO while still controling the company. Then it matters. That has happened once in the history of the world. Facebook, like its purchase of Instagram, is an anomaly. It does not matter.
Sure early stage valuations may come down. They should. What Facebook has shown is that private valuations are out of line with public valuations.
That does not mean startups can not raise good money or find good exits. While the argument can be made that the Facebook impact had not worked its way through the system yet, Oracle's purchase of Vitrue for a reported $300 million and Salesforce's purchase of Buddy Media for $689 million are exhibit A and B. Both companies in the social space. Both companies with solid exits for all involved. Both companies valued at north of 10x revenues. Everybody is happy.
For the vast majority of startups Facebook's impact on valuations does not matter. It is an externality that may not impact you and even if it does it is one that you can not control. Go build your business with a focus on getting to profitbility with as little investment as possible.
You do that and everything else will take care of itself.
Before I go any further I want to give some kudos to Facebook. More than half the people in the United States use the social network. I think the number something is like 900 million worldwide. Facebook is an important consideration for any marketer. And you have to give it to Zuck. Despite donning a hoodie at inappropriate times he has matured as a business leader. He is completely in control of Facebook. And a billionaire before 30.
So great job to all the good folks that work at Facebook, their investors, and the founders. At 11:00am today Facebook is going to go public and their life will change forever. Congratulations.
With that said, Facebook is going public at $38 a share. That $38 puts the company's market cap at $104 billon. That is the biggest IPO valuation ever by an American company. It will make Facebook the 23rd largest US company by market cap (larger than Amazon) while being beyond the 900 mark in terms of annual revenue.
Last year Facebook had $3.7 billion in revenue and generated an even $1 billion in earnings. The valuation is 28x revenue and 104x income. The P/E is 106 compared to Google's 18. The stock may pop today in a frenzy, driving these multiples and ratios even higher. Seems a little rich.
So the big news is that Facebook acquired Instagram for a cool $1 billion dollars (I can't even type that without thinking about Dr. Evil). A billion dollars is a lot. It's big. To put it in context here is how it stacks up with other photo acquisitions over the years.
I mean it is big. And it is big because the future of social is mobile and the essence of Facebook is sharing pictures. Regardless of the price I can see why they did the deal.
Insta was becoming a threat to Facebook. I first noticed this during a trip to my nieces Bat Matzvah two months ago. Insta was becoming the social network of choice among the 13 year old crowd. My 12 year old picked it up. My 13 year old declared "Facebook is boring."
And it was moving up the age stream real fast. Abby, my wife of a certain age, was using Insta. It is actually the first social network that she ever actively used. Insta moved her beyond the necessity of LinkedIn and her voyeurism on Facebook to actually engaging and posting on a social network. Upon learning about the deal via a Facebook post by me she actually made a rare Facebook comment "Say it isn't true! They'll ruin it."
I don't know if they will ruin it or not. I hope not, as Insta is one of my two favorite social networks at the moment (the other being Foursquare).
I do know this. A billion is a big. I hope Facebook makes it work for itself and for the Insta users.
Over on the Nebo blog Kevin Howarth is doing a series of interviews that feature marketing thought leaders both locally and nationally. Kevin was gracious to ask me to participate and we had a fun conversation about interactive marketing. Kevin's interview, with much better graphics than FoG, is being republished here with permission.
What do you feel is the most important aspect of how interactive marketing has developed over the last few years?
Interactive marketing has transitioned from command and control to a more user-generated focus. For any online marketer to be successful, they have to embrace user-generated content and online communities. That means empowering communities to help them spread the word about a company’s products and services. This kind of focus has led to a heavier emphasis on customer service. If you don’t have happy customers, then they’re not going to talk about you. Or they’re going to say bad things. The vast majority of good marketers understand that they are no longer 100% in control. Five years ago, people really didn’t understand this lack of control but I think they understand it now.
How is search and interactive marketing impacting how companies start up their businesses today?
It’s where they start. When a company begins, all they have are themselves and some word of mouth elements. An online presence via social is the least expensive way to amplify what you’re trying to do. SEO and SEM are obviously very important as core aspects to any technology company’s marketing. For example, at Half Off Depot we’ve seen that the way local merchants used to go to market has gone away. The Yellow Pages, local magazines and newspapers are gone or in steep decline, and merchants need a way to market online. We help them with the online piece so that they stay in front of their customers face-to-face.
Companies also have to figure out where “home” resides. Home might be their webpage, or it might be a Facebook page. Either way, companies really have to integrate social from the start while building this “home” presence. Website design has really started to emerge as a competitive advantage. For example,Fab.com is a beautifully designed site, and they actually used design to demonstrate how they’re going to be different from competitors. I don’t think people talk enough about the importance of good design or take into consideration how it can really impact the customer experience. In turn, customer experience can impact word of mouth and viral marketing.
What’s your current assessment of the Atlanta marketing community?
In my opinion, Atlanta is very strong from a technology marketing perspective. But we do a bad job letting the world know about it. We have established well-known companies like MailChimp and WhatCounts, and there are a number of email service providers like Silverpop. There are also quite a few companies starting to play in the social space, and we still have a strong cluster of traditional interactive marketing companies. Atlanta marketers have such deep domain knowledge of interactive marketing that it’s inevitable that they’re starting to apply that knowledge into different verticals and new emerging areas. At its core though, Atlanta is best at B2B. Even the more well-known consumer-focused companies have a heavy B2B bent, and a lot of Atlanta’s marketing companies direct their energies toward that demand.
You’ve mentioned social quite a few times. Why is social so important in today’s marketing climate?
The opportunity for social is understated. Everything is eventually going to be that way. Today, my teenage children cannot imagine a world without the Internet, and they are part of a demographic completely immersed in social. I think marketing is eventually going to become all social, and social is going to be one of the primary marketing drivers as other traditional mediums continue to fragment.
And how does mobile play into the mix?
Social is big, but mobile is the future. Anything that you wanted to do on a computer five years ago, you can now do on a three by six inch device. Today, I think it’s still a little bit difficult to do ecommerce on a mobile device, but that’s quickly going away. Behaviorally, people are not afraid to buy things on a device. It’s just hard to do sometimes because of the initial set up and ease of use, but that’s all going to get solved. For example, Square is making it easier for phones to accept credit cards, and local Atlanta startups such asWhisper Communications are also emerging into this space to help make B2B mobile transactions easier and more secure.
What are your thoughts about how marketing measurement has changed over the years?
If you look at one of the primary drivers of why interactive marketing is growing so quickly, it’s because people are spending more and more time online. That’s half of the equation. The other half is that interactive marketing is much more efficient than traditional marketing from a structural perspective. Not only is it less expensive online versus offline, but you can very accurately measure the effectiveness of what you’re doing in real dollars and cents. More and more companies are demanding that kind of measurement, and I see that trend continuing as audiences fragment and spend more time online.
How does content strategy fall into the marketing mix?
Content is king again, but it’s not necessarily because the content is truly unique. It’s because it will drive traffic to your site. You need good, strong, consistent, and deep content in order to effectively drive traffic. You’ve got to give people the content they want, in the format they want, at the price they’re willing to pay, and when they want it. There are many different variables, but the people who are successful at putting those things together are really good at getting people to buy their products and services.
What marketing trends do you feel will have the most impact in 2012?
Marketing spend will continue to follow people. People are spending much more time on the Internet than they did in the past, and marketing dollars have yet to completely follow that trend. Marketing dollars will continue to go where the people go. Right now, people are on social and I see that trend continuing for the foreseeable future until the next “social” emerges. I often talk about how there were the PC wars, the browser wars, the search engine wars, and the social wars. We had winners in each one of those categories. I don’t know what the next war is. But there is going to be something that pops up that’s truly disruptive and that no one’s really thought about. Consumers will interact with technologies in ways that we can’t even think about right now.
VentureBeat reported today that Fab just closed a $40 million round led by Andreessen Horowitz. Fab is an oft talked about company in the halls of Half Off Depot. Before today I do not know about the company's pivot from a social network for gay men. Interesting.
(1) A laser-like focus on design. From the design aesthetic of Fab.com’s website and mobile applications, to the products that are featured for sale, to the end-to-end customer experience, Fab.com is all about good design. (2) Social commerce. More than 50% of Fab.com’s 1.2 million members have come from social sharing. (3) Innovation. Fab.com builds all of its own technology and is the world’s pioneer in integrating social and commerce features to enhance the product discovery process.
So one of my coworkers walked up to me the other day, evidently after perusing my social stream.
He: "Man you need a handler."
Me: "I think I can handle myself pretty well."
Which lead to a nice long discussion about the role of social and my role at Half Off Depot. The reality is, at the moment I am very much the voice of Half Off Depot. If I could only get DeShong to write something it would change things a little bit. Get the team to tweet and book more. We actually have some plans to extend our social activities and executive exposure beyond me to Patrick Best one of our cofounders and Brian Conley our CEO.
But somebody to handle me? I don't think so. I know enough about this stuff to stay between the guardrails.
So Half Off Depot is looking for a social media/community manager. I am the hiring manager for the position and have been having a bit of a struggle in finding the right person to fill the role.
Last night I took the matter into my own hands. I went into my Twitter account and started going through the list of people that I follow. There are about 300 or so of these folks. I follow folks that I think are interesting, fun, and smart. In some way we have a shared interest.
I started looking for people that I follow that have a shared interest in social media and fit the profile of what Half Off needs. I found five that I thought would be good candidates. I sent them direct messages.
The result. Two meetings setup for this weekend (I like people that are willing to meet on the weekend and set up such meetings via social messaging) and two more in the planning stage.
Twitter can be a pretty effective recruiting method.
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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.
