By Francis Moran
I heard the saddest story the other day.
A few years ago, we worked on the launch of a new personal finance website developed by a veteran personal financial advisor. The site was detailed, secure, incredibly useful and solved a sharp, expensive and disruptive pain that the advisor had been running up against his entire professional life.
Our media launch went well. We got some decent coverage, both in mass media and, more valuably, in the trade media reaching financial advisors. Although the site was designed for individual subscriptions, advisors were identified as its most important channel to market since they were expected to counsel their clients to use it.
We were a little confused when the campaign was not continued past that initial launch, especially since some of the best opportunities we generated for the client were over the long term, including, for example, an agreement to have the site’s creator contribute a regular column to one of the key trade publications in the space. From the other folks working on the launch we heard encouraging news about the possibility that the site would be white-labelled by one of the largest firms of financial advisors on the continent, and other early signs of traction. So we were at a bit of a loss when everything went unexpectedly quiet.
Still, it wasn’t the first time that a client had invested in a launch only to tell us they would be unable to continue funding the program so we moved on, occasionally curious about what had become of the endeavour.
Then, last week, I heard the full sad story.
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By Leo Valiquette
The verdict is still out as to whether Goldman Sachs’ investment in Facebook heralds an IPO, but the $50 billion valuation it places on the popular social media platform is nonetheless a scary portent.
While Alex blogged last week about what this deal could mean for those who use Facebook and other social media tools for work and play, I couldn’t help but think that history may be repeating itself.
Late last week, CFRA’s John Budden and Rob Snow discussed the logistics around Goldman Sachs’ “special purpose vehicle” intended to skirt around the U.S. Security and Exchange Commission’s 500-shareholder rule. Rob characterized the US$500 million being put into Facebook by Goldman Sachs and Russian investment firm Digital Sky Technologies as a venture capital round, for lack of a better term.
“It’s just a staggering multiple for a private company,” Budden said of the lofty valuation the investment places on Facebook. Consider that $50 billion against the hard numbers: For 2009, Facebook had revenues of around US$777 million and net income of around $200 million.
“It has the feelings of the bubble that we experienced in year 2000, but it is different in character,” Budden said.
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By Leo Valiquette
Communications strategist Caroline Kealey has, over the past 10 years, marched to her own drum as the founder and chief executive of Ingenium Communications.
Her consultancy has carved a niche for itself in the nation’s capital and across the country in the “art and science of communications and marketing strategy” providing, in addition to its strategic communications and marketing services, facilitation, training and organizational development.
As with so many other consultancies, regardless of their discipline, this meant that Ingenium’s intellectual property resided almost entirely within the grey matter of its people, and especially of its leader, Kealey herself.
Six years ago, Kealey decided to change that. Despite being a busy single mother with a full-time business, she set out to lever the insight and expertise developed over a 20-year career into an educational resource for professional development and training. The Ingenium team, with a substantial amount of goodwill and in-kind support from friends and allies, set to work. The outcome is the Results Map, deemed by its creators to be the most comprehensive online tool for strategic communications planning available in the world.
Kealey took the time to share her thoughts on the tenacity required to launch her new venture, the challenges of bootstrapping, and the strategic marketing that has turned a largely local consultancy into a global play within a matter of weeks.
Q: Where did you get the idea for Results Map?
A: I think the idea came from my experience in having written now close to 400 communications strategies across a wide range of sectors and clients. I realized that much of the process is quite repeatable and that we had quite a lot of expertise in this specialized area. I also realized that, while seemingly a bit odd coming from someone who makes her living as an external consultant, optimally this process is most beneficial if it’s done in-house. So, I came up with the idea to package what we’ve learned from experience and create a methodology that communicators can easily apply within their organizations, tapping into their unique knowledge and experience with their subject matter and audiences.
Q: How did you go about validating the idea?
A: This whole project has been bootstrapped on the back of our traditional consulting practice and therefore integrates hundreds of conversations as part of regular client engagements and workshops. We carried out extensive market research to establish if there is anything like this … we looked at comparable solutions for other disciplines and went through an extensive process of one-and-one interviews in 2008 with people in different facets of the industry – academia, public, private, para-public sectors. We used all this to map out a business plan and worked with a focus group of 30 people to validate the concept from both a business and marketing point of view.
Q: What key challenges did you face turning this into a commercially available product?
A: This was far and away the most significant and complex project I have ever managed. The process has been ongoing over a six-year period and has been self-financed. The sheer tenacity and the focus required was a major challenge since the project had to run alongside our regular work and business development. Stitching this together into something coherent with an end goal in mind was a very significant challenge. This is not for the faint of heart.
Q: Where did you turn for sources of funding and other support to develop and launch Results Map?
A: One of the most extraordinary experiences throughout this process has been the generosity of the community in providing expertise (and) resources and offering to make valuable connections. I was really moved to the extent to which people are willing to support an entrepreneur who has a dream. That was a big part of our success – tapping into a lot of local in-kind support, and connections. We wanted to self-finance as much as possible, but did call upon the BDC and a private investor, both of whom have been extremely supportive.
Q: How do you characterize your experience, as an entrepreneur, in trying to secure funding and other key pieces of the puzzle?
A: As is often the case, it’s hard to appreciate the sheer volume of work and energy that this has required. In terms of lessons learned, you can’t underestimate the time and effort that isn’t immediately visible when you set out – the complexity of translation to another language, finding an online payment solution that works, developing a marketing plan, and addressing innumerable technological challenges. It all takes deep consideration, analysis and quality decision-making to position the company for success, and adjust in real-time to dependencies and changes in the development plan.
Q: What key entrepreneurial lessons did you learn through this? What would you do different next time?
A: If you roll back the clock, this could have gone in many different directions. Early on I became concerned by time-to-market and that other people would come in and scoop us. But that was fairly short-lived because I had trouble imagining that there would be too many others who would have the passion to drive through such a difficult task … call it stubbornness or stick-to-it-ness, it was clear that it was the road less travelled.
Most of the development work I did on this was between 5 and 7 a.m. before I got my kids up to get ready for school; that’s obviously not everyone’s cup of tea.
The technical development of the product took place over six months. This was very aggressive and in hindsight could have been done more comfortably over a year or 18 months. However, we had committed to complete and present by June 2010 at the International Association of Business Communicators World Conference in Toronto. As a result, we licensed our training platform from Telesto, a local development firm. Again, my whole orientation was on niche expertise, not on developing a tool in-house, from the ground up. This proved to be a good decision because the time and cost required to create a platform from scratch would have been prohibitive.
Q: What has been the market response to Results Map?
A: A few weeks ago I was running a local consulting company. Now our technology is on four continents and we are writing proposals for Fortune 500 companies … We have reached into some spheres that would not have been possible two weeks ago. We even have the government of Tanzania interested in our methodology.
This is precisely what we wanted to do with this product, have a global impact, and so far it’s off to the races.
Q: How did you take advantage of your attendance at the International Association of Business Communicators World Conference to launch of Results Map?
A: We had a whole strategy to make a splash at that event to capitalize on the fact that there were 1,500 communicators there from around the world. We ran a Twitter contest, a guerilla marketing campaign, exhibited with a booth, and I was a speaker. We very much took our own advice on having a plan and executing against that plan on a shoestring budget. People told us we were one of the highlights of the event, and that is entirely the result of our careful planning in terms of marketing, planning and positioning.
Now the challenge is chasing down all of our leads. The scope of our business has exploded in the space of a couple of weeks so while I’d thought the product development was the end of a goal, it really is just the beginning.
By Leo Valiquette
Last week, a new angel investing network launched in the National Capital Region to support new business initiatives, mentor the next generation of entrepreneurs, and of course, generate great returns for investors.
The Capital Angel Network (CAN) is an informal network sponsored by the National Angel Capital Organization (NACO) where angels can view potential investments and discuss them as a group. The goals are to increase the quantity, quality, and success of angel investments in Ottawa, to create a greater pool of capital for innovative start-up companies and to complement existing angel groups.
Laurie Davis, a long time angel investor in the Ottawa area and a member of CAN’s board of directors, took a few moments to share his thoughts.
What was the impetus behind the creation of this new network?
Davis: I meet with entrepreneurs all the time and they tell me they have a great deal of trouble raising money. It’s always been difficult, but much more so in recent times for various reasons. It takes a lot time and effort to find enough angels to give you the amount of money you need. So if you can gather a number of angels together in a group, it saves the entrepreneur a lot of time and effort.
From the angel’s point of view, I enjoy working with others in a group and hearing their perspectives on things before agreeing to commit money.
What are your key objectives and goals?
Davis: Obviously this is only a useful exercise if companies get funded. In the end, the goal is to have people fund companies they find useful and interesting. We are going to track what happens and see if by the end of the year we have four or five companies that have been funded.
How is CAN different from other angel investor organizations that we have seen in Ottawa over the years, such as Purple Angel, Band of Scoundrels and the Ottawa Angel Alliance (OAA)?
Davis: I am a member of Purple Angel, a founder of OAA and friends with members of Band of Scoundrels. What are we doing different? We got some feedback when OAA wound down that there wasn’t much appetite for a formal organization. With OAA, you had to pay membership dues and commit to a certain level of investment. People didn’t like that level of formality. The bottom line is to try something different until you find something that works. The challenge of course, is to make sure you have real investors, as opposed to the room getting filled up with lawyers, accountants and other service providers looking for business. With the informal model that becomes a little harder, but we’ll be watching it.
Where do you think we have the most significant gap in turning great ideas into competitive commercial products that make it to market?
Davis: In general we have people who know how to go about building a product, but that whole go-to-market strategy, to know how to get a product to customers and to identify real customers – that’s the problem we have.
How will CAN help early stage companies overcome this hurdle?
Davis: We are not going to be tackling it directly. The key thing is, if you have a group of smart people in a room, the expectation is that someone will step up and help. The whole idea of angel investing is not to just provide money, it is to get involved and help where you can. We hope to see a lot of that.
What do you think of Terry Matthews’ recent announcement of his new commercialization fund?
Davis: It all helps. None of us are competing. There is a problem out there that needs to be solved and anything that can be done to solve it is a great benefit to the community.
What is the future of the venture capital model?
Davis: I wish I knew. It certainly is not pretty out there right now. If you look at it from an entrepreneur’s perspective, it is painful. And they are trying to address that by creating companies that need less capital. There are some businesses that you can launch with a few hundred thousand dollars, but others you simply can’t without tens of millions of dollars – and those are the companies no one wants to start right now. This is a huge problem and I don’t know how it’s going to be resolved. There is talk that institutional investors will invest directly in companies, as they once did – that would certainly help, but I haven’t seen this happen so far.
I heard the saddest story the other day.
