Startable – Healy Jones’ & Prasad Thammineni’s Blog

My (occasional) co-blogger, Prasad Thammineni, had his company featured in a great BusinessWeek article. BusinessWeek’s well known technology reviewer, Arik Hesseldahl, wrote a solid review of Pixily. 

First of all, this is a really cool acknowledgement of Pixily’s growing success. The article has a very realistic description of Pixily’s service. As a happy user of Pixily, I agree with Arik’s positions around how easy it is to use and search within formerly dumb paper documents. I also agree with his opinion that it would be great if users could merge documents and delete pages from within a document. 

Secondly, this is an example of  great PR for a startup. I’m sure we can all learn a bit about developing solid PR from Prasad… like, how did he get BusinessWeek to review his product, how did he get in touch with Arik, what did it take to convince him that the service was worth reviewing, etc. 

Finally, I’d love to hear from Prasad what this review has done to his site’s traffic and new customer sign ups. Is it creating buzz that is translating into sales??

Thankfully I’ll be getting lunch with Prasad today so maybe I can learn a bit about this stuff… and not to steal any thunder, but I think Twitter might have been involved…

Here are a couple of interesting links I found today; too busy for a real post:

Google’s search share up to 72%

Well, not too surprising. At the bottom the article also notes that longer searches are increasing in frequency. Wonder what kind of implication that will have on online paid search results/key word purchases?

How to make display ads suck less

Funny title to an article addressing a real problem – display advertising is often lacking in the creative department. I heard this several times at the OMMA conference a few weeks ago. Agencies and advertisers want to have better and more targeted display ads but don’t know how to create it. Although, I wonder if they would know enough to buy it if there was a technical solution to the problem…

Silicon Alley Insider is reporting that Google will show much lower growth this quarter… yet another sign that the world’s poor economic condition is going to crimp the growth in online advertising. If Google’s revenue growth falls to 11% this quarter then the 15% revenue growth in search advertising projected by some analysts for search in 2009 starts to look pretty darn aggressive.

Note to online startup founders: VCs are not in the mood to hear about business models driven by online advertising… You may need to find another way to monetize all those eyeballs (sorry, I mean users, eyeballs was terminology from the LAST crash.)

Another silly little tip for the entrepreneur pitching venture capitalists:

VC Pitch Tip #7 – Format your financial model for printing

If you send a copy of your financial model in Excel to a VC make sure that at least the summary page(s) are formatted to print. I realize this probably sounds a bit stupid – after all, you are trying to get funding to grow a business, not win any awards for Microsoft Excel skills. But you need to keep in mind how the VC is likely to see/use the model. Often the model is simply opened up from the email and printed… by an assistant… and handed to the venture capitalist as they are walking into the meeting with you. At this point the VC will look at the model and think “man, this entrepreneur has no idea how to project their startup’s cash needs.”

Does this sound far fetched? It happened to me last week. Read the rest of this entry »

A recent article on the expected growth in SEO advertising has prompted me to think a bit about how online advertising will be affected by the current downturn. It’s pretty clear technology and marketing budgets are going to be cut (duh, they already are) but I wonder how advertisers will adjust their mix?

There was a lot of talk at the OMMA Behavioral Advertising Conference about the chance that advertisers will flee to search, as it produces the easiest to measure ROI. However, it is also becoming more apparent that search is positively impacted by display and other advertising. For example, as Comscore study showed a 173% lift sales when display and search advertising are used together, vs. a 121% increase in sales when search is used alone. Additionally, the Comscore study showed that

Among 139 studies in which consumers’ online behavior was monitored following exposure to a display ad, the average lift in the number of visitors to the advertiser site (i.e. percent change in reach between the test and control groups after adjusting for any differences that existed prior to the start of the campaign) was 65.0% during the 1st week following the first exposure to an ad.

Display does positively impact traffic and sales, but it is hard to measure this effect beyond the actual low click-throughs seen with display ads. 

My basic point it that I wouldn’t be surprised if display advertising took a bit of a hit – but this will create opportunities for sophisticated advertisers with tools that can track advertising impact “beyond the last click.” These sorts of tools may do well during the recession, assuming they can provide a provable efficacy – and assuming the can talk to the right advertisers.

I was going to do a post entitled “Talk to your VC about reserves.” Last week I put together an opening paragraph on the subject and a few thoughts on an outline for a post. However, I no longer need to do that because Mark MacLeod of StartupCFO.ca just published a great blog post on the exact subject! I’ll preface his article a short version of my intended post on the subject and then link to his article.

Talk to your venture capitalist about reserves

After an early stage venture capitalist makes an investment in a startup the firm allocates a certain amount of cash from that particular fund for follow on investments in that particular startup. This is a pretty important process. VCs need to make sure they have enough capital on hand to continue to support the startup as it grows to a cash flow positive position. Startup founders need to be positive that their investors have the dry powder to help them create a sustainable business.

The current, challenging market means that many startups are requiring “extra” capital (and time) to get to an exit or cash flow positive. At the same time, it has become much more difficult to find outside investors for follow on financing rounds. All this is putting pressure on the dollars that venture capitalists have reserved for their follow on investments in their existing portfolios… thus, it is a great time to speak with your current investors about how much capital they have allocated for your company. You will probably want to keep this in mind as you are developing your projections – make sure you have reasonable funding assumptions to get to the finish line!

Thus, the lead in to Mark MacLeod’s post on VC reserves.