Spectacular Crowdfunding Fails And Their Impact On Entrepreneurship

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This post was originally published on Toptal.com BY NERMIN HAJDARBEGOVIC – TECHNICAL EDITOR @ TOPTAL. Click here to read. Republished with permission.

Before I proceed, let me make it absolutely clear that I have nothing against crowdfunding. I believe the basic principle behind crowdfunding is sound, and, in a perfect world, it would boost innovation and provide talented, creative people with an opportunity to turn their dreams into reality.

Unfortunately, we live in the real world, and therefore it’s time for a reality check:

Reality /rɪˈalɪti/
Noun

  1. The state of things as they actually exist.
  2. The place where bad crowdfunded ideas come to die.

While most entrepreneurs may feel this mess does not concern them because they don’t dabble in crowdfunding, it could have a negative impact on countless people who are not directly exposed to it:

  1. We are allowing snake oil peddlers to wreck the reputation of crowdfunding and the startup scene.
  2. Reputational risks extend to parties with no direct involvement in crowdfunding.
  3. By failing to clean up the crowdfunding scene, we indirectly deprive legitimate ideas of access to funding and support.
  4. When crowdfunded projects crash and burn, the crowd can quickly turn into a mob.

But Wait, Crowdfunding Gave Us Great Tech Products!

Indeed, but I am not here to talk about the good stuff, and here is why: For every Oculus Rift, there are literally hundreds of utterly asinine ideas vying for crowd-cash.

Unfortunately, people tend to focus on positive examples and overlook everything else. The sad truth is that Oculus Rift is a bad example of crowdfunding, because it’s essentially an exception to the rule. The majority of crowdfunding drives doesn’t succeed.

How did a sound, altruistic concept of democratizing entrepreneurship become synonymous with failure? I could list a few factors:

  • Unprofessional media coverage
  • Social network hype
  • Lack of responsibility and accountability
  • Lack of regulation and oversight

The press should be doing a better job. Major news organizations consistently fail to recognize impossible ideas, indicating they are incapable of professional, critical news coverage. Many are megaphones for anyone who walks through the door with click bait.

The press problem is made exponentially worse by social networks, which allow ideas to spread like wildfire. People think outlandish ideas are legitimate because they are covered by huge news outlets, so they share them, assuming the media fact-checked everything.

Once it becomes obvious that a certain crowdfunding initiative is not going to succeed, crowdfunding platforms are supposed to pull the plug. Sadly, they are often slow to react.

Crowdfunding platforms should properly screen campaigns. The industry needs a more effective regulatory framework and oversight.

Realistic Expectations: Are You As Good As Oculus Rift?

Are you familiar with the “Why aren’t we funding this?” meme? Sometimes the meme depicts awesome ideas, sometimes it shows ideas that are “out there” but entertaining nonetheless. The meme could be applied to many crowdfunding campaigns with a twist:

”Why are we funding this?”

This is what I love about crowdfunding. Say you enjoyed some classic games on your NES or Commodore in the eighties. Fast forward three decades and some of these games have a cult following, but the market is too small to get publishers interested. Why not use crowdfunding to connect fans around the globe and launch a campaign to port classic games to new platforms?

You can probably see where I’m going with this: Crowdfunding is a great way of tapping a broad community in all corners of the world, allowing niche products and services to get funded. It’s all about expanding niche markets, increasing the viability of projects with limited mainstream appeal.

When you see a crowdfunding campaign promising to disrupt a mainstream market, that should be a red flag.

Why? Because you don’t need crowdfunding if you have a truly awesome idea and business plan with a lot of mainstream market appeal. You simply need to reach out to a few potential investors and watch the money roll in.

I decided against using failed software-related projects to illustrate my point:

Most people are not familiar with the inner workings of software development, and can’t be blamed for not understanding the process.
My examples should illustrate hype, and they’re entertaining.

That’s why I’m focusing on two ridiculous campaigns: the Triton artificial gill and the Fontus self-filling water bottle.

Triton Artificial Gill: How Not To Do Crowdfunding

The Triton artificial gill is essentially a fantasy straight out of Bond movies. It’s supposed to allow humans to “breathe” underwater by harvesting oxygen from water. It supposedly accomplishes this using insanely efficient filters with “fine threads and holes, smaller than water molecules” and is powered by a “micro battery” that’s 30 times more powerful than standard batteries, and charges 1,000 times faster.

Sci-Tech Red Flag: Hang on. If you have such battery technology, what the hell do you need crowdfunding for?! Samsung, Apple, Sony, Tesla, Toyota and just about everyone else would be lining up to buy it, turning you into a multi-billionaire overnight.

Let’s sum up the claims:

  • The necessary battery technology does not exist.
  • The described “filter” is physically impossible to construct.
  • The device would need to “filter” huge amounts of water to extract enough oxygen.

Given all the outlandish claims, you’d expect this sort of idea to be exposed for what it is within days. Unfortunately, it was treated as a legitimate project by many media organizations. It spread to social media and eventually raised nearly $900,000 on Indiegogo in a matter of weeks.

Luckily, they had to refund their backers.

Fontus Self-Filling Water Bottle: Fail In The Making

This idea doesn’t sound as bogus as the Triton, because it’s technically possible. Unfortunately, this is a very inefficient way of generating water. A lot of energy is needed to create the necessary temperature differential and cycle enough air to fill up a bottle of water. If you have a dehumidifier or AC unit in your home, you know something about this. Given the amount of energy needed to extract a sufficient amount of water from the air, and the size of the Fontus, it might produce enough water to keep a hamster alive, but not a human.

While this idea isn’t as obviously impossible as the Triton, I find it even worse, because it’s still alive and the Indiegogo campaign has already raised about $350,000. What I find even more disturbing is the fact that the campaign was covered by big and reputable news organizations, including Time, Huff Post, The Verge, Mashable, Engadget and so on. You know, the people who should be informing us.

I have a strange feeling the people of California, Mexico, Israel, Saudi Arabia and every other hot, arid corner of the globe are not idiots, which is why they don’t get their water out of thin air. They employ other technologies to solve the problem.

Mainstream Appeal Red Flag: If someone actually developed a technology that could extract water from air with such incredible efficiency, why on Earth would they need crowdfunding? I can’t even think of a commodity with more mainstream appeal than water. Governments around the globe would be keen to invest tens of billions in their solution, bringing abundant distilled water to billions of people with limited access to safe drinking water.

Successful Failures: Cautionary Tales For Tech Entrepreneurs

NASA referred to the ill-fated Apollo 13 mission as a “successful failure” because it never executed a lunar landing, but managed to overcome near-catastrophic technical challenges and return the crew to Earth.

The same could be said of some tech crowdfunding campaigns, like the Ouya Android gaming console, Ubuntu Edge smartphone, and the Kreyos Meteor smartwatch. These campaigns illustrate the difficulty of executing a software/hardware product launch in the real world.

All three were quite attractive, albeit for different reasons:

  • Ouya was envisioned as an inexpensive Android gaming device and media center for people who don’t need a gaming PC or flagship gaming console.
  • Ubuntu Edge was supposed to be a smartphone-desktop hybrid device for Linux lovers.
  • The Kreyos Meteor promised to bring advanced gesture and voice controls to smartwatches.

What went wrong with these projects?

  • Ouya designers used the latest available hardware, which sounded nice when they unveiled the concept, but was outdated by the time it was ready. Soft demand contributed to a lack of developer interest.
  • The Ubuntu Edge was a weird, but good, idea. It managed to raise more than $12 million in a matter of weeks, but the goal was a staggering $32 million. Although quite a few Ubuntu gurus were interested, the campaign proved too ambitious. Like the Ouya, the device came at the wrong time: Smartphone evolution slowed down, competition heated up, prices tumbled.
  • The Kreyos Meteor had an overly optimistic timetable, promising to deliver products just months after the funding closed. It was obviously rushed, and the final version suffered from severe software and hardware glitches. On top of that, demand for smartwatches in general proved to be weak.

These examples should illustrate that even promising ideas run into insurmountable difficulties. They got plenty of attention and money, they were sound concepts, but they didn’t pan out. They were not scams, but they failed.

Even industry leaders make missteps, so we cannot hold crowdfunded startups to a higher standard. Here’s the difference: If a new Microsoft technology turns out to be a dud, or if Samsung rolls out a subpar phone, these failures won’t take the company down with them. Big businesses can afford to take a hit and keep going.

Why Crowdfunding Fails: Fraud, Incompetence, Wishful Thinking?

There is no single reason that would explain all crowdfunding failures, and I hope my examples demonstrate this.

Some failures are obvious scams, and they confirm we need more regulation. Others are bad ideas backed by good marketing, while some are genuinely good ideas that may or may not succeed, just like any other product. Even sound ideas executed by good people can fail.

Does this mean we should forget about crowdfunding? No, but first we have to accept the fact that crowdfunding isn’t for everyone, that it’s not a good choice for every project, and that something is very wrong with crowdfunding today:

  • The idea behind crowdfunding was to help people raise money for small projects.
  • Crowdfunding platforms weren’t supposed to help entrepreneurs raise millions of dollars.
  • Most Kickstarter campaigns never get fully funded, and successful ones usually don’t raise much money. One fifth of submitted campaigns are rejected by Kickstarter, while one in ten fully-funded campaigns never deliver on their promises.
  • Even if all goes well, crowdfunded products still have to survive the ultimate test: The Market.

Unfortunately, some crowdfunding platforms don’t appear eager to scrutinize dodgy campaigns before they raise heaps of money. This is another problem with crowdfunding today: Everyone wants a sweet slice of the crowdfunded pie, but nobody wants a single crumb of responsibility.

That’s why I’m no optimist; I think we will keep seeing spectacular crowdfunding failures in the future.

Why Nobody Cares About Your Great Idea

A wannabe entrepreneur starts chatting to a real entrepreneur:

“I have an awesome idea for an app that will disrupt…”

“Wait. Do you have competent designers, developers, funding?”

“Well, not yet, but…”

“So what you meant to say is that you have nothing?”

This admittedly corny joke illustrates another problem: On their own, ideas are worthless. However, ideas backed up by hard work, research, and a team of competent people are what keeps the industry going.

Investors don’t care about your awesome idea and never will. Once you start executing your idea and get as far as you can on your own, people may take notice. Investors want to see dedication and confidence. They want to see the prototypes, specs, business plans, research; not overproduced videos and promises. If an individual is unwilling or incapable of making the first steps on their own, if they can’t prove they believe in their vision and have the know-how to turn it into reality, then no amount of funding is going to help.

Serious investors don’t just want to see what people hope to do; they want to see what they did before they approached them.

Why not grant the same courtesy to crowdfunding backers?

This post was originally published on Toptal.com BY NERMIN HAJDARBEGOVIC – TECHNICAL EDITOR @ TOPTAL. Click here to read. Republished with permission.

Bootstrapped: Building A Remote Company

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This post was originally published on http://www.toptal.org. Click here to read the post on Toptal.org       Published by JAN SCHULZ-HOFEN – FOUNDER & CEO @ PLANIO

If you ask me, working remotely rocks. I’m currently writing from a small beach bar located on a remote island in southern Thailand. Looking up from my laptop, I see nothing but the endless ocean and its crystal clear blue waters. I’ll be enjoying this morning undisturbed and focused on my work because the rest of the team hasn’t even gotten up yet. Time zones work out really well for distributed teams.

My colleague Thomas recently talked to 11 thought leaders in project management about the impact of remote work on a company; some scrum experts argued that distributed teams could work together effectively while others came out strongly against it.

I understand the concerns; you can’t just open up the office doors and release everyone into the wild. It’s not guaranteed that you’ll end up with a thriving business. Marissa Mayer at Yahoo famously axed remote work in 2013 after feeling that some employees abused it.

So how does a tech company get this working remote thing right? Read on. The following is based on our story at Planio and how we made it work.

Enter Planio, my remote company
There are a number of things which motivated me to start my current company. Breaking away from client work while retaining all the benefits of being a location independent freelancer was one of them.

In 2009, I was sitting in the shadow of a cypress grove situated in a beautiful Mediterranean-style garden overlooking the rolling hills of Tuscany, working hard on a new side project of mine: Planio.

It’s a project management tool for people like me: developers. Planio helps make client projects more organized and transparent all while reducing the number of tools and platforms needed to do the job. Planio is based on open-source Redmine (an open source Ruby on Rails-based software project), which I’ve used remotely with my own clients since its very beginnings. So, in a way, remote work is already in Planio’s DNA.

Fast forward to today, and my small side project has grown into a real company. We’re a team of 10 now, serving more than 1,500 businesses worldwide. We have an office in Berlin, but many of us work remotely.

In this article, I’ll dig into the principles, tools and lessons that have helped us along the way. After reading it, I hope you’ll be able to architect your software company so it’s remote-friendly right from the start.

“Talk is cheap. Show me the code.” – Linus Torvalds
Every Thursday we have an all-hands conference call where we discuss what we did the previous week and what’s coming up next.

At the beginning, we spent a lot of time discussing ideas before deciding on what to do, but we found that it’s a lot harder when some team members are on a poor quality telephone line and you can’t see them.

Now, we often just “build the thing” and then discuss it – we create a working prototype with a few core ideas and then discuss that. For instance, we recently hit some performance issues with our hosted Git repositories. Instead of discussing and analyzing all the possible ways in which we could potentially save a few milliseconds here and there with every request, my colleague, Holger, just built out his suggested improvements in a proof-of-concept on a staging server to which we directed some of our traffic. It turned out well and these ideas are going into production.

This method focuses everyone’s minds on action rather than talk. The time invested in writing code is paid back in less time spent talking in circles.

Use Text Communication
Real-time communication punishes clarity. Instinctively calling a colleague when you need something is very easy, but it’s not always your best course of action. I can’t remember the number of times I’ve started writing an email or a Planio ticket for a problem only to solve it myself just while writing it down.

Zach Holman, one of the first engineering hires at GitHub, agrees: “Text is explicit. By forcing communication through a textual medium, you’re forcing people to better formulate their ideas.”

Text communication also makes you more respectful of each other’s time, especially when you’re living multiple time zones away. Immediate communication can be disruptive; the person might be in the middle of figuring out why the last deployment went wrong. With an email, s/he should be able to consider your write-up at a more convenient time.

Be as Transparent as Possible
Time spent worrying about office politics isn’t conducive to shipping working software, and transparency promotes trust. It’s no coincidence that many remote-by-design companies, such as Buffer, have radical transparency. In the case of Buffer, it shares revenue information and the salaries of all its employees.

Automattic, the company behind WordPress.com, also emphasizes transparency. In his book, The Year Without Pants, Scott Berkun shares his experience working remotely for Automattic, and that all decisions and discussions are internally available to employees in its P2 discussion platform as part of its emphasis on transparency.

The chat feature in Planio works in a similar way. Discussions are open for everyone to see and chat logs are linked automatically from the issues discussed so nobody is left out; even new hires can read up on what previous decisions were made and why. When I started building the chat feature, I considered adding a feature for chatting privately with others, but when we discussed it as a team, we ended up leaving it out because we wanted to keep team communication as transparent as possible.

I think transparency is critical for remote teams. For example, imagine you’ve just joined a team of remote developers. Perhaps you’ve never met your new colleagues. You don’t know the unspoken rules of behavior. You might be worried about whether you’re doing a good job. Are your teammates actually being sarcastic or do they really mean their compliments? Is everyone privately discussing how good of an engineer you are?

Digitalize Your Systems
We choose our services based on what they offer by way of online platforms, from telephone providers to banks (many of them will even offer a small financial incentive for going paperless, plus it’s great for the environment, too). I’m lucky to have a lawyer and an accountant for Planio who are comfortable sending emails or messages with Google Hangouts instead of summoning me to their offices. (I strongly recommend you ask about this at the first meeting.) Bonus points for getting them to sign up with your project management tool and become a part of your team!

We’ve even digitized our postal mail; at Planio, we use a service called Dropscan that receives our letters, scans them and forwards the important ones to the appropriate person. You don’t want to your friend to pick up and read them out over Skype. If you cannot find a mail-scanning provider in your city or country, some coworking spaces offers virtual memberships to maintain a physical mailing address while you’re away.

For those companies sending out mail, there are services available so that you never have to visit a post office again. We use a German printing company with an API that automatically sends a letter along with stickers to each new paying Planio customer. It’s something people love, and we don’t have to print and mail a thing. International alternatives include Lob and Try Paper.

Should You Have a Digital Presence Mandated?
In a co-working space on the tropical island of Koh Lanta, Thailand, I noticed that someone in a support role for a major e-commerce platform was constantly on a live video feed with the rest of the team. Sqwiggle offers a similar “presence” functionality for remote teams.

I suppose mandating that all employees are on video while working might be based out of a fear that employees abuse remote work arrangements. In my experience, that’s not the case. At the tropical co-working space, there’s a certain urgency in the air, despite the laid-back clothes and coconut drinks. People are quietly focused on their laptops; it’s as if they want to make sure remote work delivers results, so they can stay out of a fixed office for good.

We found that we don’t need a digital presence because we have a great level of trust among everyone on the team. I also think that it’s paramount to respect everyone’s privacy. If your company is moving from an all-on-site setting to remote work, a digital presence might help the more anxious managers to overcome any trust issues.

Choose Bootstrapping over Venture Capital
Most venture capitalists are looking for outsized returns, so they’ll prefer an intense short burst of 12-months’ work from a team over a more sustainable pace. Front App, a startup funded by the Silicon Valley accelerator Y Combinator, rented a house in the Bay area for their three-month stint in the Y Combinator accelerator program. The goal is to optimize for evaluating a business idea quickly.

Given the outsized return mindset, you may have a hard time convincing a venture capitalist to fund you when you’re working from a beach in Cambodia. This is why many venture-backed startups (such as Buffer or Treehouse) that use remote work built leverage first. Buffer was profitable before taking on investment while Ryan Carson, the founder of Treehouse, had already proven himself with a previous startup.

Here’s a better way than venture capitalism: bootstrapping. It means financing your company with revenue from initial customers. In my opinion, it’s by far the superior approach because it enables you to build your company on your own terms and remain in control. However, it often requires working two jobs or freelancing on the side while you get your company started. It took me about two years working on both Planio and client projects (via my software development agency LAUNCH/CO) to get going, but it was well worth it.

Bootstrapping also forces you to build a business that generates revenue from the very beginning, which I find much healthier. Hint: Building a B2B SaaS makes this much easier than creating a consumer app because businesses are far more willing to pay monthly subscriptions if it adds value. You have to sell a lot of consumer iPhone apps at $0.99 to cover monthly payroll for even the smallest of teams.

Price Your Products Strategically
One of our first clients was a massive technology company with billions in annual revenue. Obviously, I was delighted that they’d choose us over much bigger, more established competitors. They’re still a happy customer, but we have moved away from very large enterprise accounts; I’ve found that they require a lot of hand-holding and in-person meetings before they’ll become a customer.

As Jason Lemkin points out in his article on scaling customer success for SaaS, when you have big enterprise accounts, someone will have to get on a jet to visit them twice a year. If you’re a small company of two or three people, that person is going to be you, the CEO, the CMO and the CSO all rolled into one overworked hamster.

Keeping your pricing model within the rough bounds of a $49/$99/$249 model as suggested by developer-turned-entrepreneur Patrick McKenzie means avoiding having to hire an enterprise sales team, and having to earn the massive amount of capital required for it. You, the customer, don’t expect the CEO to pop in at Christmas with a box of chocolates when you’re paying $249 a month.

Build on Open Source
A venture-backed business based on proprietary software is great when your play is a “Winner Takes All” game and own the market. When you’re a bootstrapped company, open source software can give you reach and leverage you could never have achieved, otherwise.

There’s precedence of profitable tech companies building a business around open source software; Basecamp famously open-sourced Rails, guaranteeing themselves a supply of highly qualified engineers for the rest of eternity. GitHub has become a unicorn, leveraging the open source project Git that Linus Torvalds started to manage the Linux kernel sources. Our friends at Travis-CI started as an open source project, ran a crowdfunding campaign and then turned it into a remote-focused bootstrapped business (which also campaigns for diversity in tech through its foundation).

Planio is based on Redmine and we contribute many of our features and improvements back to the community. This works great in multiple ways; our contributions and engagement in the community help advance the open source project and Planio gets exposure to potential new customers. For us, it’s the most authentic way to build a brand; by showing our code and taking part in open technical discussions, we can demonstrate that we know our stuff!

Hire Proven Professionals
Hiring a fleet of interns every year makes sense only if you’re intent on scaling up your employee count as soon as you hit the next round of funding.

Outsourcing tasks is easy if it’s copy-and-paste, but you don’t want to outsource your DevOps to someone with the lowest hourly rate when you have thousands of customers relying on your servers. You’ll want proven professionals, such as those at Toptal.

Matt Mullenweg, the founder of the popular open-source blogging platform WordPress, stated that by focusing on quality means that his company, Automattic, predominantly hires experienced candidates who can handle the unstructured working environment of a remote company.

That means it “auditions” candidates by paying them to work on a project for several weeks, then hire them based on performance. Automattic has found this method is far more effective in finding the right candidates than traditional CVs and cover letters.

Emphasize Quality of Life
Work takes up a massive amount of our time, year in and year out. It should not be something that you just do to be done with; you’d probably end up wasting a huge chunk of your life. The best source of motivation and the main ingredient for great results is a work environment that’s inspiring, enjoyable and fun. Travelling, learning and engaging with people from different cultures makes work feel less of a sacrifice or necessary evil (at least in my life) than when working a nine-to-five office job.

It’s not just about travelling the world, though, there’s the personal freedom aspect. Parents get to spend more time with their kids, thanks to avoiding a two-hour commute. You don’t have to live in Silicon Valley to earn San Francisco wages. Maybe, your significant other gets a great job opportunity abroad, too. You’re not faced with the painful choice between staying at your job and continuing your career or becoming a “trailing spouse” with limited career options.

At Planio, even though many of us work remotely, we all try to meet up at least once a year in a fun location. Last year, we spent a few weeks of summer in Barcelona, and several of us met here in Koh Lanta, this year. I’m still looking for ideas for the next destination, so let me know if you have any travel tips!

What tools, ideas or techniques have you found that make working remotely easier and more effective? Leave a comment below.

This post was originally published on http://www.toptal.org. Click here to read the post on Toptal.org       Published by JAN SCHULZ-HOFEN – FOUNDER & CEO @ PLANIO

The New Wave of Entrepreneurship

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There is a multi-trillion dollar economy opening up to technology faster than ever. It has been driven by trends that have changed the nature of how entrepreneurs will be characterized going forward; specifically, industry executives will be the next wave of in-demand startup CEOs.

In April of 2007, Apple changed everything with the launch of the iPhone. It is hard to imagine that it has only been 8 years since the release of the first truly pervasive smartphone, but there is no denying its impact has been world-changing. Beyond the creation of a new dimension of industry-driven, by location-based, services (and with it, a myriad of billion dollar companies), an equally significant phenomenon emerged. By creating technology that was intuitive to the consumer masses, every person around the world started to embrace technology as more than just a work tool. Lawyers, doctors, car mechanics and people from every sector of the economy not only had a tool for productivity, but a piece of technology in their pocket they embraced as an intimate part of their lives.

Furthermore, these new consumers could now point to a standard for usable technology. Cumbersome, enterprise legal software that won’t allow a lawyer to search cases from outside the office is no longer acceptable. For those outside of the Silicon Valley silo, conversations can be heard from construction workers sitting on a lunch break saying “Wouldn’t it be nice if there was an app to …”.  Unfortunately, these conversations are often too far away from Silicon Valley’s ears, which are still dominated by the talk of what will be the next WhatsApp or Instagram. Even so, a new breed of entrepreneur is emerging who see firsthand the challenges in their industry, and with that the opportunity to make a world-changing impact, and these entrepreneurs do not fit the founder archetype that many Silicon Valley investors look for.

Photos from http://www.ablogtowatch.com, http://securityaffairs.co, http://geniusapp.com, and http://www.rakenapp.com

Previous decades saw similar shifts in entrepreneur characterizations. The late 90s were about Harvard MBAs applying traditional management techniques to leverage brand new Internet technologies. The “aughts” brought on the “22 year-old Stanford Computer Science” graduate applying technology to a low hanging industry. Now, in this decade, we are seeing a new wave of entrepreneurship driven by industry executives with deep product backgrounds leveraging technology to disrupt a traditionally non-tech industry.

For the past 2 years I’ve had the opportunity to see this shift firsthand as the managing partner of Silicon Valley Software Group (SVSG), a firm of CTOs focused on helping companies with their technology strategy. SVSG has seen entrepreneurs ranging from movie producers, lead singers of platinum album rock bands, travel executives, and hedge fund managers all trying to figure out how to leverage their domain expertise through technology. After a number of similar engagements, a few observations have emerged:

In each venture, a product-focused entrepreneur saw the adoption of the technology among their peers in a particular industry and, with that, the opportunity to create a product focused on that industry.
None of these entrepreneurs had notable tech experience.
Hardly ANY of these high profile individuals had relevant connections with the Silicon Valley community.
This last observation is of particular importance!

The combination of growth capital, multidisciplinary talent, and mentors sharing best practices around how to create hyper-growth businesses are often taken for granted by those who are part of the ecosystem. However, the disconnect between Silicon Valley natives and outsiders is shocking. Many of the companies SVSG have come across have no ability to raise strategic capital at first because their businesses are too risky when considering common pitfalls they are more likely to fall into compared with their Valley peers. Concepts as commonplace as the lean startup methodology are welcomed as sage insight to these new entrepreneurs.

What is missing for these new founders is a bridge into Silicon Valley. To date, this has been stymied by a narrow mindset from the Silicon Valley community. However, the forces of capitalism will eventually prevail and these new entrepreneurs will find their own community to center around. Keen investors will lead the herd and take advantage of existing markets ripe for change. Incubators and accelerators will emerge with a focus on entrepreneurs with deep industry experience. We are in a tech boom right now and there are countless ways to apply technology to industries that haven’t changed in decades. For those sitting in the corner office, the time has come to venture out, there are markets to disrupt.

This post was originally published on http://www.toptal.org. Click here to read the post on Toptal.org

Digital: The New Normal in Strategic Marketing

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Digital is pervasive and it is impacting  every aspect of business in the 21st century. Globally as the strategic marketing focus shifts towards consumers to enhance the brand experience, marketers are faced with the challenges of managing data, mapping the customer journey and maintaining consistent ROI attributing to business growth.

ContentFlo(CF) is pleased to launch an expert series where we will share global thought leaders perspectives on the impact of technology, marketing and digital in the service economy. In the launch edition of the series, the ContentFlo team interacted with Mark Ware, Managing Partner, Mark Stephen Ware Consulting on Digital, the new normal in strategic marketing.

Mark Ware

Mark Ware
Managing Partner, Mark Stephen Ware Consulting

CF– 1. Digital has provided a new dimension to strategic marketing, how do you foresee organizations adapting their strategy to this new normal?

Mark Ware – Frankly, I think organizations generally struggle with a digital vision, implementation and leveraging of performance data. In the US, given the state of the economy’s sluggish growth (~ 2%) and additional impacts of Obamacare, employers are focused on revenue and survival. Taking the time to build out a digital strategy is left for when firms have more time to focus on it, but in my opinion, that’s a big mistake. Yesterday is the time to develop and implement a digital marketing strategy beyond just having a Facebook page and blog for example. Fear of “dark data” is a real and should be motivating firms to aggressively embrace their own historical performance data, digital property data and delivery metrics. This will require the leadership team committing to a digital strategy and making resources and funding available, as appropriate, to make it a reality.

CF – 2. Are organizations aptly allocating budget to go digital? If not, why are organizations still apprehensive about digital?

Mark Ware – Clearly they should and many do. Cash is tight and the enterprise is holding onto its cash. The economy and employer-repeated costs are a big part of that rationale, along with the recent US stock market roller coaster; yet, there is a sense of more uncertainty in the future and so cash remains tight. It’s easy to see the
shyness with additional investment. However, as marketers know all too well, by not allocating cash for digital marketing, these firms are making growth, at a time when growth is desperately needed, that much harder to secure. Best practices indicate annual marketing spend should be 15% of net income, presuming results drive income.

CF – 3. With Consumer at the center of all marketing activities, Why do brands still fail to connect with consumers in the right way?

Mark Ware – Part of the answer is the myriad of channels and the overload of “noise” coming at consumers. They have even less time to see, discern and react and that trend will only increase with even less time. Additionally, I suspect many marketers and their handlers are so focused on scrapping up as much revenue as they can as quickly as they can, due to the uncertainty, I hinted at earlier, along with the ‘peer pressure’ of big data (i.e. “What are you doing with your Big Data?). The key, in my view, is to take a back-to-basics view on revenue growth: look at your historical performance data, and examine closely who bought, why they bought, what experience they had with you when they bought and why they bought again (or didn’t). That alone would underscore the lack of insights and necessity for investment in digital marketing to grow closer to the client and grow revenue too.

CF – 4. What ails marketing at leading organizations in the digital age?

Mark Ware – It’s like advertising’s problem at times: too much flash and not enough results. I know of firms that have fleets of personnel globally chewing away on data, which is important; but the data for data’s sake won’t create innovation, help manage growth or develop personnel. It won’t birth a “BIG IDEA!” either. We need creative people for that. Ultimately a firm’s “business hygiene” must focus on long term strategic plays that generate strong short-term returns while examining the basis of who bought what from the firm, and the all important ‘why’. The best firms are effective digital marketers (like Apple) because they know when/where to dial it down (noise), capture attention and analyze their performance metrics/customer journey data.

CF – 5. What are your recommendations for marketing and business leaders who are striving to do away with the organizational silo for an effective digital enterprise?

Mark Ware – Five recommendations:
1. Have a vision for where you want to take your firm. That’s the focal point for the entire firm to rally around, including marketing.
2. Appoint a CMO who is empowered to affect change – real change — from look/feel to content development and market communications.
3. Treat marketing as an investment, anticipate a return, but also fully support, empower, staff and equip the team. Putting ankle cuffs on the best soccer players in the world will not win them
4. Foster a culture of innovation — bring it up at every meeting –– sales, marketing, HR, etc. –– And feed the suggestions to marketing, who in-turn should vet each week and help create a punch list of “HOT” marketing Big Ideas to go for. Creativity has to lead the way.
5. Corporate marketing and product marketing must be tightly coupled as they should be likewise with sales — not just by saying, “Oh, we’re using (for example) Salesforce and Chatter for all of our sales/marketing efforts …”, but instead look at the go-to-market positioning, messaging and tone and work harder at ensuring consistency across the brand’s services/product lines along with what the sales team are saying/using to detect leads and pursue deals.

The Perfect Social Media Post

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 The economy has blurred physical boundaries. Reaching out to the right audience, at the right time, with the right messaging can help brands resonate in the minds of their customers.
Messaging is extremely important to establish the connect with the audience. Brands must understand that each social media platform is unique and a blanket way to broadcast the message goes unheard in the digital world. It is important that brands understand each medium and create a unique content strategy to engage with their audience.
Here’s an excellent infograph by QuickSprout  on “How to create the Perfect Social Post” that covers all social channels that your brand may have a presence.
How to Create The Perfect Social Post
Courtesy of: Quick Sprout