Starting Up with Jim Price

Can Social Networking, Blogging, etc. Help Drive Your Startup's Growth? February 13, 2011

We all know the old saw regarding PR:  No news is bad news.  Does this truism carry over to the blogosphere, Facebook-o-sphere and Twit-o-sphere? 

Yes and no.

These days, it’s through social networking as much as by any other means that growth companies connect with their customers and establish relationships – living, breathing dialogues – with those customers.  So it’s a crucial part of a dynamic branding strategy.

On the other hand, there are definitely ways to stumble online and bruise your company’s image if you’re not careful.

But before you jump in – or even if you already have an online presence – here are some things to think through:

1.  Think about the company persona you wish to project.  What are the public persona and personality characteristics that you wish to project to your public, that you want to come across in your conversations?  Your company’s persona is an important element of your brand identity.  Are you highly reliable and knowledgeable?  Carefree and a bit profane?  Like a feminine confidant?  Nerdy and unguarded?   

2.  Decide whom you want to put out-front representing your business.  On the one hand, you probably don’t want just anyone and everyone in your company piling in and blogging, Tweeting and commenting-on-comments on Facebook.   On the other hand, multiple faces (and distinct voices) representing your firm can present a more human, appealing face for the company.  For instance, it’s often a good idea to have the CEO out there (perhaps with a staffer backing her up with suggested comments/ideas, or to help with timeliness of responses when she’s traveling and/or super-busy).  But it’s probably also good to put your CTO and your product managers out there dialoguing with customers.

3.  Allow your humanity to come through – Don’t over-edit.  Allow each writer’s unique voice shine through. 

4.  Track what’s said about you.  Through Google Alerts (http://www.google.com/alerts) and similar tools, monitor everything that’s said about you online.  And where appropriate, jump in with an appropriate comment or counter-comment.

5.  Never comment anonymously.  It can come back to bite you.  Always be above-board and honest about who you are and whom you’re representing.

Eileen Zimmerman had a good post on this topic in yesterday’s New York Times that adds some useful insight:  http://www.nytimes.com/2011/02/13/jobs/13career.html?_r=1&ref=technology .

Cielo’s Acquisition is Bringing a Major New Employer to Michigan February 10, 2011

As Jon Zemke accurately pointed out yesterday on Concentrate (http://www.concentratemedia.com/innovationnews/cielomedsolutionsacquisition0136.aspx), a lot of folks here in the Rust Belt get nervous as cats when they hear that a local company’s been acquired by someone from out-of-state.  They hear “acquisition” and they hear “layoffs” and “closing offices.”

But when we sold Cielo MedSolutions last week to D.C.-based The Advisory Board Company (ABC), one thing that mattered greatly was what would happen to our people.  As Zemke points out in his article, ABC has plans to not only keep Cielo operating in Ann Arbor and keep its full staff, but to double it in short order.  Cielo is going to become a part of the rapidly-growing software operations captained by Paul Roscoe, an ABC exec and CEO of Crimson Business Intelligence Technology.  Crimson is an Austin, TX-based healthcare software startup acquired by ABC in 2008.  Roscoe has gone on record about his plans to grow Cielo’s/ABC’s existing Ann Arbor footprint.

The other major thing we founders sweat over in an acquisition is how our investors will make out.   Our Cielo investors have made — stay with me on this complicated math — approximately a gorgeous return on their investment.  Dave Morin and I can hold our heads up on this one.

Ah, Liquidity: Cielo MedSolutions is Acquired by The Advisory Board Company February 4, 2011

This morning, The Advisory Board Company (Nasdaq: ABCO) announced the cash acquisition of Cielo MedSolutions of Ann Arbor,  a leading provider of population management analytic and patient registry software in the ambulatory healthcare environment.

Ah, liquidity…

Dave Morin and I cofounded Cielo MedSolutions in 2006.  From the get-go, we agreed that Dave would drive the bus as CEO, and  that I’d serve in the less-defined capacity of chairman/cofounder.  In the early days, I focused my efforts on everything from corporate structuring and fundraising to strategic alliances, branding and marketing.  In the last couple of years, I’ve served in a board capacity, as Dave and his superb team have built the startup into a first-class operation. 

They’ll now be growing their presence in Ann Arbor, and with the backing of ABCO’s distribution muscle and tremendous customer relationships within health systems, we anticipate significant growth in software license count and revenue as well.

Read more: http://www.digitaljournal.com/pr/215416

Purpose-Written iPad Newspaper “The Daily” Accelerates the Sea Change in Journalism February 2, 2011

This morning at New York’s Gugenheim Museum, Rupert Murdoch’s News Corp. dropped a long-anticipated bomb:  they launched The Daily, a brand-new “newspaper” built from the ground up as an iPad app.  You can subscribe for $39.99/year or $0.99/week at the iStore. 

See these articles: http://mediadecoder.blogs.nytimes.com/2011/02/02/the-daily-makes-its-long-awaited-debut/?ref=business  and  http://voices.washingtonpost.com/fasterforward/2011/02/news_corp_launches_tablet-only.html  and  http://techland.time.com/2011/02/02/news-corp-finally-unveils-the-daily/.

The Daily is notable because it’s the first stand-alone, tablet-only newspaper published by one of the old-line publishers, but not encumbered by the legacy of print journalism.  Insiders who’ve been shown previews of The Daily‘s content report that it’s very interactive and high-gloss, similar to the best magazines that have been released on the iPad to-date.

This new tablet app may prove a bellweather of the new journalism; it’ll be very interesting to follow this to see how The Daily  fares.

Obama's "Startup America" Program Claims to Back Entrepreneurs February 1, 2011

The latest out of Washington (other than “…OMG, what r we going to do about this popular uprising in Cairo?!…”) is a pretty flashy new White House initiative called “Startup America.”  The newly-announced public/private partnership  (see http://bits.blogs.nytimes.com/2011/01/31/the-administration-starts-its-startup-policy/) is to be led by AOL founder Steve Case and Kauffman Foundation CEO Carl Schramm,  and is committed to the following program goals according to the White House website: 

• Expand access to capital for high-growth startups throughout the country;
• Expand entrepreneurship education and mentorship programs that empower more Americans not just to get a job, but to create jobs;
• Strengthen commercialization of the about $148 billion in annual federally-funded research and development, which can generate innovative startups and entirely new industries;
• Identify and remove unnecessary barriers to high-growth startups; and
• Expand collaborations between large companies and startups.

The item that first caught my eye was expanding the access to capital for startups.  What’s being implemented in this regard is, unfortunately, more window-dressing than a high-impact pr0gram.  Specifically, over the next five years, the Small Business Administration (SBA) is committing $2 billion as a match to private-sector investment in Small Business Investment Companies (SBICs) in promising high-growth companies.  SBICs are privately-owned and -managed investment funds that are often small or early-stage venture capital funds.  SBA-guaranteed bonds will match private capital raised by these SBIC funds and serve as a catalyst for accelerating capital support for startups and high-growth firms.  There are two programs, as follows  (quoted below from the White House website announcement):

• “$1 Billion Impact Investment Fund:  SBA will commit $1 billion to those funds that invest growth capital in companies located in underserved communities. This will include investing in economically distressed areas as well as those companies in emerging sectors such as clean energy.  SBA will provide up to a 2:1 match to private capital raised by these funds, partnering with private investors to target “impact” investments.
• “$1 Billion Early-Stage Innovation Fund:  Early-stage companies face difficult challenges accessing capital, particularly those without the necessary assets or cash flow for traditional bank funding.  For high-growth companies, the gap is particularly acute in the so called “Valley of Death” for financing rounds between $1-4 million. Over the past 4 years only 6% of all venture capital has been deployed in that stage, with 70% of the financings going to only three states – California, Massachusetts and New York.  The Innovation Fund will target this gap, providing a 1:1 match to private capital raised by early stage seed funds.”

 Is this whole announcement a good thing?  Absolutely.  Will it have a pronounced impact on the U.S. economy and create lots of new jobs?  Absolutely not.   Here’s why: 

First of all, these monies will be invested in venture capital funds, not directly in job-creating startup businesses.  These funds typically have a 10-year life, and usually deploy most of their capital in the first 4-5 years.  By the time you sort through the math, we should expect an average lag of 2-3 years between the time when the government invests in an SBIC (a VC fund), and when the VC in turn invests in those bucks in a startup company. 

Secondly, $2 billion spread over 5 years is only $400 million per year.  The White House accurately points out that 70% of VC financings occur in California, Massachusetts and New York.  So if we assume that this $400M/year is invested in the 47 “have-not” states, that’s only $8.5 million per state per year.

…So we’re looking at adding an additional $8.5 million in startup investment capital per state per year, beginning three years from now…  Are we going to feel any positive impact of that in the trenches of the entrepreneur community? 

Not one bit.