Chicisimo : using PR for community-building

Yesterday, we had a session with Gabriel Aldamiz-echevarria, founder of Chicisimo. Gabriel was here to talk a bit in general about his entrepreneurial story so far, and then specifically about using PR for a startup. In this case, the success or failure of Chicisimo hinges on it's ability to build a large and involved/active community of users. Good PR is key to this.

The most interesting things that I took away from the session were:-

Gabriel ventured into a business that he didn't 'get' at first. Can't blame him, Chicisimo is about young girls sharing their 'looks' and commenting on each other. Gabriel is quite far removed from this target segment !
But it doesn't matter if you don't really follow why do people behave in a certain manner online. What matters is that you think of a way to get 'em together on your site to continue doing whatever funky thing it is that they do, and then make money off it !!

Inspite of a PR background, Gabriel was emphatic on this - the product has to speak for itself. All other publicity is secondary.

And while still on the topic of publicity, it's imperative to figure out how best to influence your target segment.
In Gabriel's case, his target segment were the young fashionistas, who probably devoured fashion magazines and blogs. But these fashion journos and bloggers probably got pitched similar ideas every single day.
So Gabriel decided to go a step further, and pitched to people in his own circle of entrepreneurs, both here and in Silicon Valley. End result, Chicisimo got some buzz going for itself in the 'business of fashion' circles, and that drew in the fashion journos and bloggers like anything !

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Inaki Arrola - Keeping it real, keeping it simple

We've all heard the old saw about common sense being fairly uncommon. Inaki Arrola, an eminently normal guy feels he's "strange" when compared to entrepreneurs. He just might be right...

This session, we got some pretty grounded, real-life insights.

2 people in his family, buying the same car, comparing notes, realize they've been quoted different prices by different dealers, realize there might be an opportunity here, and you know how it goes. He went into business with cousins and friends with the grand startup capital of EUR 28.500.

Don't do business with friends and family he says. In fact, a recurring theme in his talk was the need to keep work and family separate. Keep their needs separate, keep your time for them separate.

Mix the two, and you might not be left with a wife, and not much of a business either !!

Inaki stressed the importance of beginning with the end in mind - do you want to get into entrepreneurship because you want fabulous riches, do you want to be your own man, do you want to keep embracing the newest idea out there. Not that you're gauranteed to get whatever you set out to get, it's just a question of getting the goals right.

Inaki got into a business that was already estabilished, the incumbents were (and still are) much bigger than him, his new company had no strategic differentiating factor, his team was light on tech. talent in the beginning. And yet, here he is today, talking to us to-be 'tech start up managers' and doing fairly well for himself.

His secret sauce is, like the man himself, very simple and straightforward: Connect with the user as best as you can. Now that's quite vague, so he went further - keep the user interaction on the website as minimal and simple as possible. He thought back to the websites he liked, and what exactly was it about them that he liked, and distilled his likes and dislikes into a sleek landing page for coches.com. This kind of a thing sets coches.com apart from the bigger guys, who're so similar that you wouldn't notice a thing if you switched their logos around on their websites.

In keeping with his common-sense way of doing business differently, he said that he rarely offers equity to new employees to lure them in or keep them motivated. The reason is quite simple - equity in most startups is going to turn out to be useless for the poor youngsters who'd rather have some disposable income. To keep them motivated, Inaki prefers bonuses when the company is doing well. It's a lot more meaningful for the employees.

All said, a very sensible entrepreneur. I'm very impressed !!
Main takeaway, in a field where everyone is going nuts trying to be different, just doing the common-sense thing might make you different from the rest !!

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Fund-raising, serial entrepreneurs and Kaka

Ka-ching !! the sound of money raining in from VCs....
Yesterday, we had a session with Jorge Mata, a successful serial entrepreneur and investor, the man behind My Alerts and Berggi and many more. Jorge gave a talk on raising funds for startups.

The talk was extremely interesting - the topic was money, and how you can raise it, so obviously everyone was interested, and Jorge is a speaker with a flair for the "quotable quotes". And yes, Enrique had put up the twitter list for our class hashtag #ietechstartup, and most of us were tweeting Jorge's comments in realtime.

At the outset, I don't really get the idea behind becoming a 'serial entrepreneur'. I can see why it might appeal to some, but it's not for me. Jorge is a self-proclaimed 'serial entrepreneur'. So while I personally don't agree with this concept, I must say, Jorge's reasoning was very coherent and consistent.

The points that were either new to me, or somehow thought provoking were :-

* It´s very important to relinquish stakes to VCs very carefully
Hand over too much, and even a successful exit would leave you no better off financially.

* a good board is there to protect your investors from you

* Processes are probably more important than platforms/trends
Too many people are thinking about platforms, trying to become the next Facebook or Twitter, and not enough thinking about solving a problem or improving a process

The best part came when a classmate and friend prefaced a question with a blunt statement 'It looks like you're more of a professional fund-raiser than a professional entrepreneur'. Ha ha. I loved it !!
Then again, different perceptions, different definitions. None necessarily better than the other.

OK, how does Kaka fit into this?
Jorge Mata raised as much money in the peak years (´99) as the entire valuation of the MAB today ~ € 60 Mn.
To put that in context, Real Madrid purchased Kaka for about € 65 Mn similar amount !!
Different priorities :)

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Masterclass - the business of blogging

Last week, we had the first 'live' session at our 'managing tech startups' class. We had Julio Alonso talk about bootstrapping, the attention economy and the importance of analytics in the attention economy.

JULIO ALONSO and WEBLOGS SL

A brief bio. Long story short, in 2005, Julio left a successful consulting career to start Weblogs SL, a privately owned co. running 40+ vertical blogs in Spain and Brazil. He's doing quite OK, and for the last two years, he's been featured in El Mundo's list of the 25 most influential people on the internet in Spain.

SO WHAT'S SPECIAL ABOUT IT: BOOTSTRAPPING

Personally, the most interesting bit about his story is the part about bootstrapping and making it a self-financing venture. Partly, it was an attempt to avoid the excesses of the crazy internet bubble that burst not so long ago. Partly, it was a goal to remain EBITDA positive, every single year, even if it came at the cost of slower growth. But I think the biggest factor was this idea of being in it for the long haul, not just to make a quick buck (which is what VCs want). This takes a lot of guts, and self belief.

THRIVING IN THE ATTENTION ECONOMY : STICKING TO THEIR ROOTS

Weblogs is sustained by advertising revenue. And advertisers pay for ads shown to readers when the content of the blog is relevant to the ad. So the more the content, and the more the readers, the more the revenue. Simple enough?

Maybe not that simple. A key asset and differentiator for Weblogs is their regular and knowledgeable reader-base. You can't mess around with these people by taking them for granted and bombarding them with ads, or even worse, ads irrelevant to what they're reading. The balance between commercializing the content and retaining the reader's attention is a fine one.

Weblogs' policy has been to stay true to their roots, prioritize content over ads, and where possible, enmesh the content and the ads together. Julio talked about a pretty interesting idea 'content going into advertisements', as opposed to 'advertisement going into content', which is the norm. They did this by embedding their (pre-existing content) recipes into an ad campaign they conceptualized for a food chain.

Their superior (i.e. more relevant) content is what'll ultimately keep them safe from the new threat posed by content-farms. Moreover, this is where Weblogs' bootstrapping comes into the picture in a business sense: they are free from any investor pressure to maximize revenue by plastering ads all over the place, or to increase page-views by directing the creative bloggers to "follow" a trend.

ANALYTICS:

One thing Weblogs could do better is to capitalize on their prime asset, their loyal reader-base. With their drilled-down analytics, they can charge advertisers a premium fee for ads shown to their loyal readers, as against a standard fee for ads shown to the one-time users.

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Online news sites suck !!

Reading news articles online is a pain. There is hardly any content, you have click through a gazillion pages to get to the point, and the ads keep distracting you from the (largely useless) content.

AdBlockplus is the solution, I hear you say...
Hmm. Only partially.

I'm using it, and I usually end up with 2/3 of the screen blank. And the infuriating next, next, next clicks are still there.

Anyhow, this pic says it better than any words possibly could.

Picture courtesy a friend, A.B.C.

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