SOCIAL MEDIA EXPLAINED

Is It Ever OK for Founders to Sell Off Their Company Shares?

Image credit: Illustration © Jakob Hinrichs

One of the strangest things about being a startup founder is that I'm running a multimillion-dollar company but earning a salary far below my market value. My company may be worth a lot, but the vast majority of my personal net worth is tied up in an illiquid asset (company stock), which is no help to me as a mom with two small kids, a mortgage, medical bills and day-to-day expenses.

Five years in and easily $500,000 below what should have been my accumulated earnings since 2009, I'm left scratching my head. I hear murmurings that some founders sell personal shares long before an exit. Should I do the same? Should you if you're in this boat?

A quick survey of other startup founders revealed that they believe it's OK to sell a tiny percentage of stock (in the single digits) once a company's valuation reaches $10 million.

The Valuation Game

Figuring out how much your company is worth is an art and a science.

The art: The story you pitch to investors matters. Spend time researching and crafting a pitch that represents the company's long-term greatest revenue or exit potential, not its current situation.

The science: While not an exact calculation, look at the valuations of comparable companies based on income and market presence. If you're an early-stage startup with no profits, base your valuation on traction metrics such as how many new customers you have, how many come back and conversion ratios, then apply them to a total future market opportunity.

What you want to avoid is the obvious cash grab. People grimaced when Foursquare founders Dennis Crowley and Naveen Selvadurai took home $4.6 million--23 percent--of their $20 million Series B funding in 2010.

Most of the founders I spoke with agree that you should try to sell to inside investors first. "It gives you a cleaner cap table, and you can tell a better story around it; i.e., the insiders wanted to help you stay focused on the long term," says Jon Crawford of e-commerce platform Storenvy. He points out that if the people closest to you are pushing for a bigger slice of your stock holdings, it's a testament to just how valuable they think your company is.

Karl Jacob, startup founder and angel investor since the 1990s, has witnessed CEOs sleeping in their cars because they can't make their rent. "That's not good for anyone, including the investors, who need a CEO working long hours in top mental and physical form," he says. To ensure that you don't end up in this scenario, Jacob advises startup founders to pay close attention to their stockholder agreements upfront to make sure they can sell a small percentage without restriction.

I'm not sure if I'll take the plunge and sell some of my stock to ease my cash crunch, but it's nice to know that it's not necessarily viewed as a bad move.

Amanda Steinberg

Amanda Steinberg is CEO of DailyWorth, the professional woman's guide to business and money.

Using Social Media To Make Offline Products More Meaningful

We may have pushed the digital image to its shareable limit, but there is still something nice about that framed desk photo (or album, or personalized tennis shoes).

By:  Kealan Lennon

With Google Street View, Yelp, Foursquare and a host of other location-aware technologies, we have successfully uploaded the world onto the Internet. It’s not enough, though, to have achieved augmented reality--the hyped tech trend that developers and entrepreneurs enthused over back in 2009. Now, as we stream the human experience 24-7, through our mobile devices and social services like Facebook and Instagram, the process is being, yet again, flipped on its head. 

Our lives are coming back offline.

When it comes to the online-to-offline conversation, we immediately think about technologies like QR and bar codes, and companies like Uber and AirbnB that illustrate this model’s ability to translate across any industry and escalate with mobile. As this category matures, other companies have sought to find the same footing.

Instead of the usual rinse-and-repeat, however, new companies like Prinstagram are taking an entirely different tack, and turning the relationships of its online customer base into the product, pushing memories, creativity, and self-expression to the forefront, and making social commerce the most tangible it’s ever been. 

First, Some Cultural Context Today’s human experience has been uploaded as a hazy, sutro-filtered snapshot, a carefully curated bite-sized moment to be easily digested and then swiped away by ever-hungry thumbs. It’s a truly unique and personalized combination of self-expression plus experience. But it’s fleeting, and it’s not enough anymore to simply tweet, update your status, pin and share. While easily consumed, none of this is meaningful or exists in our very real world.

Like never before, our lives’ content is constant, rich with memories and meaning, more beautiful than ever, and created with unheard of ease. The stage is set. 

Bringing the Feed Offline
What today’s social retailers are getting right is that the most compelling content to consumers these days is the media created by the consumers themselves. Like a photo booth or Splash Mountain snapshot, the product is compelling because it captures a story and memory. With the advent of mobile and the flurry of photo-editing apps, the media is personal, but also beautiful, stylized and ready in a snap.

Yes, people’s lives are now instantaneous and attractive--and as people can better document their real-world experiences, they’re finding new ways to bring their lives, now shared in Facebook and edited in Instagram, back off the news feed and into their surroundings. Blurb turns your Facebook photos into photo books, while Instagram has since spawned such companies as Casetagram (your favorite memories on an iPhone case) and Stichtagram (bags and pillows designed with you filtered photos), and a flood of other real-world product ideas, including this Ray-Ban sunglasses Instagram camera project. But that’s nothing compared to when a giant like Nike launches its PHOTOiD line of Instagram-customized sneakers--simply select an Instagram photo and shoe style, and you’ve got a new pair of shoes that aesthetically complement your life.

With so much potential within these social environments, these social channels are being turned into veritable flea markets letting brands and consumers complete transactions with social interactions. We’ve all seen “Facebook storefronts” but companies like Chirpify take it a step further, allowing consumers to buy products with Facebook comments and Tweets.

In the same vein, companies like Wrapp and DropGifts are Facebook-only commerce models that encourage customers to essentially forget the poke or wall post and send a gift instead--all within Facebook from selection and purchase of the gift, to a post that alerts the recipient of the surprise gift.

While the future of these companies is contingent on people continuing to trust and “live” in Facebook, they understand two fundamental components that drive companies around this model: these online social interactions are inherent in modern relationships and people have, through technology, become much more creative. If companies allow their customers to feel empowered in both aspects, the product could be as compelling and as viral as the media that personalizes it. 

Beyond the Wall
While our interactions have become increasingly casual, we’re no less sincere in our relationships and interactions. Our daily lives are chock full of traditional holidays and life milestones and the sentiment surrounding them. But up until now, brands and companies have been aiming to bring in revenue by drumming up conversations and interactions around these events instead of developing products directly from these conversations.

The ultimate goal for these and future companies is to turn these social feeds into a product and revenue source. This is the most meaningful content on the web today, and the race is on.

--Kealan Lennon is the CEO of Cleverbug. 

7 Simple Social Media Moves That Work

 
Before he started to dole out social media advice for entrepreneurs like you at Inc.'s recent GrowCo conference in New Orleans, Dave Kerpen, chairman of Likeable Media and now founder of offshoot Likeable Local, had a few things he wanted to get out of the way.

First, he said, social media is not free. Second, it won't bring you immediate results. And, third, it can't make up for a bad product or service.

If you can cope with all that, you're ready to learn how--and why--Kerpen still recommends you get involved:

1. Listen, Then Talk 
A couple of years ago, when Kerpen went to Vegas, the check-in line at the Aria hotel where he was staying "took forever," he said.

So Kerpen did what he does best--took to Twitter, and quickly posted: Waiting on line for 45 minutes at the Aria. Not worth it. #fail

Did he hear anything from the Aria? No. But he did hear from the Rio, a hotel down the street. Within two minutes, the Rio Tweeted back to Kerpen: Sorry you're having a bad experience, Dave. Hope the rest of your time in Vegas goes well.

Kerpen didn't switch hotels on that trip, but where do you think he stayed the next time he went to Vegas? The Rio. And he "liked" the Rio on Facebook. And sometime later, a friend going to Vegas saw that Kerpen had "liked" the Rio, so asked if Kerpen would recommend the hotel. His response? "I don't think it's the fanciest, but I know that they listen," Kerpen recalls telling that Facebook friend.

Kerpen pointed out that all the Rio did was pay attention to Twitter, and respond with empathy.
Kerpen recommends you do the same thing, regardless of the business you're in. "If you're an accountant, go to Twitter and search 'need an accountant'," he said. "Your customers are asking for you." 

 

2. Respond (to Everyone!)
Kerpen said 60 percent of brands--mostly big ones--currently do not answer customers or prospects on Twitter, Facebook, or other social media. As a result "you have a huge competitive advantage if you respond to your customers--and theirs," he said. (Case in point: the Rio hotel in Vegas.) 

If a customer complains, don't delete. Instead, you have an opportunity to respond publicly that you're working to solve the problem, and will send a private message to the individual so it can be fixed.

"We all know that companies are going to make mistakes," said Kerpen. "The problem isn't when companies make mistakes, it's when companies don't say, 'I'm sorry.'"

Instead, if you delete a complaint, you're sending a message that the person who wrote it doesn't matter, and you're, in essence, "inviting him to go tell someone else, to start a petition," warned Kerpen.

The only types of posts you should consider deleting? Those that are obscene, or bigoted.
When you respond, do it in your brand voice, whatever that is: serious, funny, full of puns, scientific, whatever. As long as it's true to the brand.

3. Tell, Don't Sell
Social media is most powerful when you use it to tell personal stories, not to sell your products, Kerpen said. 

Kerpen likes to tell the story of how, when he and his then fiancé couldn't afford a lavish wedding, they raised $100,000 from sponsors and got married at Brooklyn Cyclones park. That personal story, he says, helped propel Likeable into a $7 million business.

Didn't get married at Shea? Consider your humble beginnings, your personal leadership characteristics, customers who have overcome obstacles, employee challenges, community or charity partnerships. Look at your employees, products, or customers, and identify a story people will want to talk about, and disseminate it across social media.

If yours is a business-to-business company, tell a story on social media using webinars, e-books, and white papers. 

"The only thing better than telling your story on social media is to inspire your customers to tell your story," said Kerpen.

 

4. Just Be You

On this, Kerpen quoted Oprah Winfrey, who said: "I had no idea that being your authentic self could make me as rich as I've become. If I had I'd have done it a lot earlier."

As Kerpen puts it: "When I am authentic, when I am vulnerable, when I am me, customers want to do business with me." 

Who does a lot of this on Twitter, according to Kerpen? Foursquare founder Dennis Crowley, who has even posted about where he lives.

 
5. Advertise (Better)
Social media is not just touchy-feely, said Kerpen. It can drive leads, and sales. 

On Facebook, rather than just get your ad in front of huge a swath of people, you can target the right people--based on job title, interest, age, location. "Every single piece of data that Facebook's got on people you can target based on that," Kerpen said. "What's cooler than reaching a billion people on Facebook? Reaching the right 1,000, the right 100, the right 10, or the right one."

Another perk of advertising on Facebook? Word-of-mouth endorsements. You can target ads against just the friends of people who have "liked" your brand on Facebook, and when those people see your ad, they will see listed the names of their friends who like your brand, too. 

6. Give Stuff Away
If you take 10 percent off, you're marketing, 50 percent off, you're giving away value, 100 percent off, you have loyal customers for life, Kerpen quipped.

Give away good content, webinars, articles, and white papers. "I've had two people come up to me and say, 'Thank you for all that valuable information you gave away, I'm starting my own social media agency,' but I also got dozens and dozens of inbound leads because of all the value we put out there," said Kerpen.

Recently, a new client told Kerpen she had $250,000 to spend on social media marketing she'd move to Likeable because of all the free, yet useful information the company has made available.

 
7. Be Grateful
In your social media posts, regularly thank your customers, and partners.

According to the non-profit organization DonorsChoose.org, Kerpen said, of those people who received a thank you note, 38 percent were more likely to donate again.

He writes three thank you notes every day. 
"It puts me in a great mood every single time," he said.

Allison Fass is deputy editor of Inc.com. A longtime business journalist at Forbes and The New York Times, Fass has also held roles in venture capital and innovation at Hearst Interactive Media and digital strategy at a start-up consultancy. @alliefass

13 Mobile Trends for 2013 and Beyond (April 2013) - see slide show

by JWTIntelligence on Apr 01, 2013

http://www.slideshare.net/jwtintelligence/13-mobile-trends-for-2013-and-beyond 

The mobile is moving well beyond its role as a communication device, becoming an enabler for a wide range of experiences from TV viewing to shopping to banking. And mobile connectivity is disrupting industries from retail to auto to finance and beyond. The consensus is that change is occurring at an astonishing scale and speed.

In this report, JWTIntelligence outlines key trends in evidence at the GSMA’s Mobile World Congress, held in Barcelona in late February, along with examples that illustrate these developments and implications for brands. The report also incorporates insights from interviews with several mobile experts and influencers.