Moog's Viewpoints

Warning! Your are being tracked. Proceed with caution...

2008-08-12T08:47:09-05:00

There is an article in The Washington Post today about a "surprising" disclosure that some advertising networks are NOT explicitly informing consumers when they track their behavior. Shocker! Every major ad network and ad serving company has been tracking consumer behavior without informing consumers for the past ten years. And ever since Doubleclick's attempted to purchase Abacus and connect catalog purchase data to web surfing behavior most ad networks have provided a way to opt out of being tracked, which of course almost no one does.

This leads me to ask a few questions to bring some more context to the debate:

Do the press and policy makers understand the difference between collecting anonymous surfing behavior and collecting surfing behavior that can be tied back to an individual household?
Why are credit card companies and catalog companies allowed to collect and sell detailed personal purchase and financial information while lawmakers are up in arms about tracking that is both anonymous and not tied to financial or transactional data?
Is "explicit consent" better than "explicitly informing"? Is explicit consent practical?
Do consumers really even care? In my experience most consumers are willing to give up huge amounts of personal information in exchange for things such as coupons, sweepstakes, free membership etc. One way to test this is to ask the top 50 sites how often a new member looks at their privacy policy when registering.
The U.S. government provides census data that map back to a zip+4 which usually is specific to a few hundred households. Is data no longer considered personal or need privacy protection when it is about you AND your neighbors?

What do you think?

Five lessons learned as an early stage entrepreneur

2008-08-11T14:12:10-05:00

In my 16 year career (uggg, I must be getting old!), I spent 4 years at Microsoft in business development and then joined a start up (CoolSavings) as the VP of Sales and worked there for ten years, the last five as the CEO. I ran CoolSavings as a public company with 150+ employees and while revenue exploded from $21 million to $80 million. Then we took it private and I left to pursue my dream of starting from scratch, as the say - tablua rasa or with a blank slate. Now almost exactly two years later from absolutely nothing two years ago, Viewpoints Network has 12 full time employees, 750,000+ monthly users and as they say, the world is our oyster. Allll right, I hear you, get to the point. What are five lessons learned about starting an early stage start up?

1. For start ups don't hire agencies. Hire freelancers or part timers. We wasted $5k a month retainer fees on a pr agency, an SEO agency and a advertising agency. None of them delivered any real value. The bottom line in my opinion is that if something is important enough to you, do it yourself. If it is not important enough for you to do it, than why hire an agency?

2. If you face a decision to spend money, particularly if it is going to lock you into a monthly spend, put off that decision for at least 30 days if not 60 days. Works like a charm for avoiding some real mistakes.

3. Force yourself to communicate with your employees and investors in a real substantive and honest way at least once a month. I got used to this running a public company and a company that went through some tough times, and I have come to realize that communication to key stake holders is the #1 job of a entrepreneur. (Which is why I am writing this blog. I need to broaden my definition of stakeholder to more than just employees and investors).

4. Be ruthless with your time. Really look at what you are doing every day and make sure that it has the power to move your business. It is possible to waste so much time on crap that does not matter. I use a three ring binder and write down my to do list every day on a new sheet of paper. Then I can always go back and see what I thought was important and if I got it done. Organization and follow up are critical in an early stage company.

5. Keep an open mind. You might have assets and capabilities that you did not set out to build. If you listen closely to customers you will often that they are asking you for something that you didn't think you had, but you really do. I cannot tell you how many times I have said to clients, "we don't do that". Then when I stepped back and thought about how we could do that, we really did.

So, that is a start.... more later.

Blogging is tougher than it looks

2008-08-11T13:49:11-05:00

So for the last two years I have run a social media company, which hopefully you know is Viewpoints Network. You would think that blogging should come second nature to me. But it doesn't and I need to fix that. Starting today I am resolving to post something at least four times a week. I know of no other way to get my juices flowing. I will confess though, it seem odd to start blogging without an audience or a real clear sense of who your audience is. I admire people like Fred Wilson, Mark Andreseen and Jason Calcanis who seem to be able to churn out some very thoughtful posts one after the other.

Here are some of the topics I hope to cover on this blog:

1. Interactive advertising and marketing

2. Social Media

3. Entrepreneurship

4. Politics (occasionally)

Two excellent presentations about Social Influencers

2008-03-19T08:57:04-05:00

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Cookie Cutter Thinking

2007-08-08T12:28:53-05:00

A very smart friend of mine made an interesting observation to me earlier this week. He said that many people who lack experience dealing with a certain type of circumstance will apply a cookie cutter approach when thinking about the solution. The point he was making was that complex problems are usually not the same and have many different variables. If you apply a cookie cutter approach to the problem you are likely not thinking deeply enough about all of the variables that could effect the outcome.

You have heard people say, "I have seen this movie before". Well, when it comes to strategic business decisions there is a strong chance that this movie might appear to be similar, but is really different. Maintaining the self awareness and humility to know that you have may been taught something, told something or even experienced something your self, you should always ask your self the question, "what is different this time than last?"

My friend called this advanced pattern matching. You are not just looking for 70% of the variables to be similar because, more often than not, a few, or even one, of the variables will have an out sized impact on the outcome.

A very cool version of Gnarls Barkley's "Crazy" on the Theramin

2007-06-21T08:12:25-05:00

A friend forwarded me this video this morning. My father had a very early association with the Theramin and this really made me think of him.

Why I Love Software As a Service

2007-03-07T08:14:57-06:00

Six months ago I left my position as CEO of Q Interactive an Interactive Marketing Services company that I helped start ten years ago. I ran it as a public company for the last five years and we took it private in December 2005. We had 160 employees and last year reported revenue growth of 78% to $68 million. Within two weeks of leaving in late July, I started a new company called Viewpoints Network and four weeks later had secured the first round of funding for $4.8 million. This post is some of the nuts and bolts lessons I have learned about how to take advantage of the numerous new companies who offer their services as a “Software as A Service”.

First a little bit of background. After having raised $100 million to launch and grow my previous company, I wanted to take a more measured approach this time. I have come to appreciate and value very lean and efficient businesses that “stick to their knitting” and focus on improving their unique value add. Therefore, I intended to keep the company very small (less than 15 people) for as long as I could.

Step One: Buy a computer and a printer

Opting for the safe choice, I bought an IBM Thinkpad T60 from CDW.com. I love CDW’s service and an always wowed by their incredibly fast delivery time. (My laptop came in one day). Knowing that I would need a nice color laser to print out my business plans and presentations, I bought a Dell Color Laser for $399. It has served us incredibly well. A color copy at Kinko’s is $1.00 and the cost of a color page from the Dell is 14 cents.

As we hired more staff we bought the Dell D620 laptops for about $1,200. The tech team asked for MacBook Pros which come in at about twice the price as the Dell, but I figured it was a small price to pay to keep our brilliant tech team happy. Now, those of us with a boring old Windows laptop have serious Mac envy…

Step Two: Domain Name and E-Mail Address

Among the first things I did was look for a quick and easy way to establish a “branded” e-mail address. I went to Register.com, bought a domain that was the working name of the company and then, using Google, found a provider called Intermedia.net that offered hosted Exchange for $10 per user per month. Compared to the hardware, software and personnel costs, that are typically associated with an installation of Exchange, I thought this was a deal. I suppose I could have used a standard SMTP/POP3 provider but as you will see later in this post, I like Outlook and value the wireless synch with my Motorola Q Smartphone. I later learned that Register.com is over priced and started using GoDaddy for future purchases which has worked out very well.

I should also mention that I discovered Carbonite.com around this time. They provide a great backup service for only $5 a month. I have been using this for six months and it works great and provides a major sense of security knowing that I could fry, lose, drop or otherwise kill my computer and I would be up and running with all my data within hours.

Step Three: Establish a customer and contact database

I have been a huge fan of Salesforce.com since they launched the product. We used it at Q Interactive and had about 60 people using it. I also happen to work hard at keeping my Outlook contact database current so I always need a way to synch Salesforce.com and Outlook. So one of the first purchases I made was a five person team license for $999 for one year to Salesforce.com. So here we are with a enterprise class SFA tool, enterprise class e-mail, scheduling and wireless e-mail, real time data back up and our own domain and website for less than $2,000 per year. Pretty amazing if you ask me.

In this area, I have been a long time fan of Plaxo as a way to keep my address in synch with others and up to date. I have more than 600 colleagues who also use Plaxo and every time either of our information changes, it automatically updates on our respective computers. I can also send an update out to the other 3,500 people in my Outlook address book and ask them to automatically update their contact info without me having to enter it into Outlook. I received about 1,000 responses.

I also re-joined LinkedIn as a way to keep in touch with former colleagues, customers, partners etc. I had the service search my Outlook address book and find about 600 of my contacts who were also LinkedIn users. As a result I have about 450 “LinkedIn” relationships now which have proven to be a very helpful way to stay in touch.

Step Four: Hire first employees

Previously I had a four person HR department and an eight person accounting department to rely on to make sure we were adhering to rules and regulations. For payroll, I quickly opted for SurePayroll.com. After getting my appropriate tax id numbers from federal and state authorities (which my lawyer did for me) we were quickly up and running on SurePayroll. Having used them for six months, I am a huge fan. I spend a total of about 1 hour per month thinking about payroll. Sure Payroll takes care of all the tax withholdings, direct deposit etc. It works like a charm and I love it.

I also purchased QuickBooks around this time and started using it to pay bills. The software is very, very easy to use and I think is often the case, my accountant knows it very well. I spent probably 2 hours a month paying bills and keeping the books up to date. I produce financial statements very quickly after the end of the month that look like they were done by a pro. I am sure at some point this will not scale, but for right now, the combination of me doing most of the bill paying and payroll and the accountant dropping by once a month for an hour is a great combination.

Step Five: Get the office going

Once we moved into our space, we of course needed a phone system and Internet access which we got from CIMCO. They provided our IP based phone system. Handsets from Cisco. So far, the system has been totally reliable. They manage everything and there is almost zero maintenance on our part. At under $500 a month for both Internet access and 12 phone lines with unlimited Internet access this seems like a total bargain to me.

We bought our office furniture by searching for a combination of new and used furniture. We found top of the line office chairs for 70% off their retail price through a used dealer. We are using a great “open office solution” called Herman Miller Resolve that we love.

I have found Peapod to be very quick and reliable and cheaper than other corporate coffee services.

We ordered our some of our kitchen equipment at either AbtElectronics.com or Cooking.com or Amazon.

We are lucky enough to be in a loft style building that has a FedEx/Kinkos and a UPS/Mailboxes Etc in the first floor of the building.

Jefferies 3rd Annual Internet Conference

2007-02-28T08:33:00-06:00

Jefferies 3^rd Annual Internet Conference

NYC - February 28, 2007

I attended this conference and here are my notes from the presentations.

aQuantive.

$442mm/$123mm EBITDA/28% margin
40-90% rev growth over last several years
$2.5B market cap, Enterprise Value is 20X EBITDA
Divisions are
- AvenueA/Razorfish (Agency), $267mm/17% margin
- DrivePM (Ad Network) and $52mm/18% margin
- AtlasDMT (Technology Licensing) and $122mm/41% margin
$540 million in media spend in 2006
They service 27% of Fortune 100 in 2006
DrivePM has 250 online “premium” publishers
Revenue by category: Travel & Entertainment – 16%, Fin Svcs 17%, Pharma 11%, Retail 14%, Telcom 8%
Competitive dynamics: full value chain, internal operating leverage, internal customer/supplier relationships

Shutterfly

$123mm/$20mm EBITDA/17% margins
50% revenue growth for last several years
$400 million market cap, Enterprise Value is 10x EBITDA
Photo print, scrap booking, greeting cards and calendars
Premium brand and vertically integrated
5 million orders sent in 2006
77% of new customers come direct and are “free”
Avg cost of paid new customers is $12
They have 70 customer segments that get messaged differently
25-44 yrs old (63%) 84% female, 50% with children, $75k+ income
1.7 million transacting customers in 2006, (955k in Q4) 2 average orders per customer per quarter(?)
Money Magazine did a ranking of photo services and ranked them the best.
Very impressive presentation – I really liked the CEO. I am going to test them out and probably switch from Ofoto if what he says holds true.

WebSite Pros (WSPI)

$52mm/$6mm EBITDA/13% margin
45% CAGR growth rate, Enterprise Value is 20x EBITDA
74,000 paying SMBs for web sites
23 million SMBs
Slightly over 50% have web sites
$50 to $100 per month
1-800-get-site
They build the site, get a domain, submit to search engines. They include maintenance (30 minutes a month).
For an extra fee will buy SEM
They also track e-mail responses, phone calls and faxes.
They own Leads.com
They own RenovationExperts.com
They work with Discover (original partner, was 90% of lead flow now 46%), IBM, Yahoo, Register.com, Eathlink, Quickbooks, FirstData, Verio and VistaPrint (these companies turn over their customer list and WebSite Pros does the outbound sales and they get a small revenue share).
They have 200+ FTE in telesales. (2+ year avg tenure for reps) Six call centers. Hire unskilled and then train. Build as many as eight web sites a day per employee.
Emerging competitors Network Solutions, Web.com and Yahoo.
Avg customer is 18 months. Break even for customers is 3 months.
Impressive, non nonsense, just the facts mam’ CEO
Expect 20 to 25% operating margins in two years.

InPhonic (INPC)

Largest sellers/activator of wireless phones on the Internet
$406mm/$24.5mm Adjusted EBITDA
Projecting $500mm this year, guiding to $35million for EBITDA.
Added 660,000 net subscribers last year
Shifting from one time acquisition payments to residual fees
CEO owns about 30%? Goldman Sachs is second largest holder, TCV has exited their stake.
6,000 private branded stores (for AOL, MSN, Yahoo,) and for manufacturers.
80% of consumers research wireless service online while only 7% buy it online.
They represented 40% of online phone sales. Amazon is second largest and they now have a partnership.
52% of their sales are from their own WireFly.com (expedia of Wireless). This is their lowest cost of acquisition.
Marketing cost is 28% of revenue
They spent $100 million in marketing last year. (most if not all is online)
They are expanding product offerings suh as accessories, device protection plans, mobile content, family plans, pre paid, travel related benefits.
They have 7.5 to 8.0 million customers (prospects?) in their database. They are looking at direct marketing (third party offers) as a new source of revenue.
They save time and money for customers who would ordinarily shop in the store.
They generated $2,000 for mobile carrier over four years for $340 marketing costs. ($60 per month from avg subscriber)
They work with 9 carrier system, there are 400 handset skus and 1,000 carrier rate plans, 6,000 marketing partners, and 44,000 zip codes resulting in billions of combinations.
They had a customer service melt down in Q4 2005. Rebates not granted and other major problems. Now at 80% customer satisfaction.
3 to 5% of their traffic is from SEO. They had to re-build Wirefly to be more SEO friendly. Big focus in this area.
They bid on 5,000 key words.

Bankrate

Did not go to there presentation, but a few interesting tid bits from the slides that I saw.
$100mm proj for 2007/$40mm profits
73% of their traffic is “organic” from SEO and partnerships, 10% is paid search, 17% from 75 co-brand partners such as Yahoo, AOL, Forbes. (shows the long term small potential of co-brands with portals)
487 million page views last year generated $64 million in revenue. I think that works out to a .12 cents per page view of a $123CPM which is very, very good. Shows the value of highly targeted inventory in a lucrative category.

The Street.com

I had to leave early, but a few nuggets.
$50mm/$12mm EBITDA
61% of revenue is subscription, 33% ads and 6% syndication revenue
Pushing toward 45% ads in a few years
Average subscriber spends $300 per year!
Their subscription writers are “in the money flow” meaning they are practitioners

Interesting PEW study from today

2007-02-01T09:15:34-06:00

http://www.pewinternet.org/PPF/r/201/report_display.asp

I originally saw this study mentioned at Church of the Customer blog. Although tagging is popular as part of several popular web services, it has certainly not hit mainstream yet. These stats show that is is clearly on its way.

How can lead gen be declared dead?

2007-01-30T10:06:23-06:00

Check out the post and discussion on Jeremy Liew's blog. Some good thoughts about Lead Gen. I did not see Jason's original post but I don't understand how someone can say lead is dead when it represents at least 10% if not 20% of interactive ad spending.

What do you think?