SIIA Previews - 1/26/2009
SIIA previews 1/26 – 12:51 p.m.
Larry Schwartz taking pictures of everything. My cold is putting me in a frowny mood – I’m hoping he’s not snapping any with me in them.
No network connection here at the PWC auditorium – I am blogging in Word and going to have to upload later. How strange is that?
1:01
Ed Keating kicks things off. Is nice to see some of my former clients here – Newstex’s Larry Schwartz is running quite a bit of the show at SIIA.
Kate Bluvol – Audit Partner with PWC – begins a presentation called “Shaking the MoneyTree”. Based on Thomson Reuters data, the MoneyTree report is now 14 years old – you can get it at pwcmoneytree.com, among other places.
Venture investments in the 4th quarter of 08 were down - $5.4 billion – a 26% drop in the 4th quarter, and the lowest investment since 2005. (The peak was, obviously, 2000.) First yearly decline in total investments since 2003.
Fifth highest year of annual investments in the 14 years of the report – and if you get rid of the “bubble” years of 2001-2002, it was the 2nd highest.
New York is the 3rd highest area of investment – and Media/Entertainment was the 5th highest sector (after Software, Biotech, Industrial/Energy, Medical Equipment). Retailing is last.
Most investment $ going to later and expansion stage categories, but only early-stage companies increased after last year – 24% over 17%.
“Traunch” is such a great word.
BioTech is in the lead in getting $ in NY in the 4th quarter.
There were no IPOs for venture-backed co’s in 4th Q 2008 (or 2nd Q)
Kate tries to put a positive spin on this – “good ideas are still getting funded” – but of course that’s like painting a smile on a sad clown.
Well, that was depressing!!! When’s cocktails?
1:17
Joel Dreyfuss of Red Herring continues the “it’s not so bad”. He’s moderating a panel that includes Tom Aley, of Dow Jones, and Ed REitler, who is a lawyer. Kate Bluvol is also on the panel.
Joel’s first question: “How do you survive?” Tom Aley’s response, “Create ROI models right away – you have to prove ROI – give away your software if you have to, in order to benchmark your ROI. Don’t fool yourself or your investors. Make the hard decisions now. The good news is that people are still buying products – Dow Jones is beginning to buy products, and people we sell to are coming back. Try to get really efficient in understanding where the money is, and that crosses over to venture capitalists and investors too. Understand how you, your board of directors, your key network map into those places.”
“Hunker down – you’ll be a better company for it.”
Joel: “Is there anything out of the Obama stimulus plan for startups?” Ed, “Nothing yet. The Obama admin has promised some tax cuts for small companies. What I was hoping to see was some room in the plan for funding like the old securities program like the SBA used to run. A great driver of job growth historically has been small businesses. If there was some effort to put as little as a billion dollars into the SBA and reopen participating securities program, we could see a lot of job creation.”
The securities program: Venture funds could be broken into two categories: SBIC and non-SBIC (Small Business Investment Company). During the 90s, the Clinton admin opened up small business loans being made through the government via SBICs. The unintended effect was that it allowed the SBICs to invest in venture-preferred equities, which created a boom in tech and biotech companies on both coasts, and the amount of job creation was tremendous – there are policy implications to that, and the Bush admin shut it down in 2004 – this would be a very efficient mechanism for creating jobs.
Joel throws it to Kate: “The current venture investments and players are looking at their portfolios and may be investing in companies they believe in to the detriment of companies that haven’t met expectations previously.”
Joel: “A lot of the VCs are pruning their portfolios pretty quickly these days, and if they feel a company doesn’t have potential they’re more inclined to cut it off.” Kate agrees: “They’re being much more cautious but it’s still encouraging that they’re looking at new ideas.”
Ed: “I’m a partner in a law firm and all we do is venture work – saying that it’s a good time to start a business isn’t the same as saying that it’s an easy thing to do right now. VCs are reserving more cash for their A players – the funds are making fewer new investments.”
Tom: “What do we do now? Pay a lot of attention to strategic investors” – inspirational yadda yadda. “Large corporations are starting to come around again, they may have shuttered their venture cap units but that doesn’t mean that they aren’t investing.” Cites Lexis-Nexis. “Project based, milestone based.” And whoever’s investing in your work, find the value prop for them, because they might acquire you.
Ed: “The valuations with strategic investors tend to be higher than ventures – but sometimes they want most favored nations status, first right of refusal, control of vendors, etc. But they’ll probably be looser w/the purse strings.” He also emphasizes that it IS a good time to start a business – development is cheaper, lot of talent available right now, NYC in particular is a really great resource for tech-enabled businesses.”
Tom: “VC’s have incredible value but they also sharpen their knives during a downturn in the economy” – “get a good lawyer”
A good Q&A – “give it away vs. subscriptions?”
Tom: “The premium services where you give away enough as a carrot to attract people to take a light subscription – Dow Jones is toying with it, and smaller companies have been doing that quite well, you do a hybrid of SEO and attract people and then upsell through a really good website. It’s a great way to introduce your brand.”
Discussion of auto parts database companies – selling into auto aftermarket – where repair shops can hook up with distributors. “An Amazon for autos” – and getting paid on a commission basis from the sales.
Q; “What have you been seeing in the angels market? Because I’ve been seeing offers drop by 50%.” Ed: Try to find people who really understand what you do – they will take more of a leap because they “get it”. But in general, that’s probably true.
Joel: “A lot also depends on whether or not Obama appoints this technology czar – I think everybody in the tech industry understands the damage that Sarbanes-Oxley has done.” Ed: “May lead to a lot of opportunities – new regulation may lead to a new set of solutions.” Joel: “Compliance companies.”
Tom: “Keep doing things like this.”
2:02
It’s getting cold in here and no matter how hard I try, I cannot create a network connection by sheer willpower.
Larry Schwartz gives us a rundown of other companies who have given previews at SIIA. It gets no warmer. Nor networkier.
I have to say, though, slides filled with logos definitely draw the eye. These all seem vaguely familiar, but I don’t really know them.
Larry’s kinda doing a “where are they now?” thing.
2:09
RSuite/Really is the first presentation in the preview series. Barry Bealer drives.
“It’s no longer about the document, folks.” He continues to emphasize re-use and scalability. ROI in months. He brings up Audible – I was consulting to Audible as they were licensing RSuite. Increased through-put by 100% - what he does not mention is that the data cleanup involved in that effort was responsible for a 38% increase in sales over the previous quarter.
His 5 minutes is up. Good ending!
Q&A was cute and short.
2:18
Arity Corporation – Peter Gabel, President.
“Faster, Better, Smarter, Cheaper Research” – how to plow through all the information out there in record time. “Expressway” is Arity’s product. Looks like many libraries’ federated search programs. Incorporating community content.
Clients include Elsevier, Wolters Kluwer, and…um…Chick-fil-a. (CHIK-FIL-A?)
Q: “How do you make money?” Via products that bootstrap development. Licensing, Saas service, business blowback, various models.
Q: “What content do you use?” Evasive maneuvers! Kinda Palin-esque response: “All of them” emphasis on the quality of their search rather than the quality of content that’s being searched.
They need to know more about libraries – doesn’t seem much different from library federated searches.
Q: “Your secret sauce is tagging – have you introduced a taxonomy?” A: “It’s more than tagging. We have the only commercial-quality implementation of EL++ - a reasoning platform.” “Do you own a spark plug?” (Actually, no. I am spark-plug-free.) Emphasis on relationships that tie things together and deliver the right answer. Need to talk more w/him.
2:29
It is freezing in here. Inside View is up. Alberto.
InsideView – aggregates social network info that analyzes it for relevance, and distributes to bberries, websites, Oracle, Salesforce.com, CRM apps, etc. Contact info, small bio, etc. For CRMs.
Customers – Ariba, IBM, etc.
Ends a minute early. Questions pretty standard. All Alberto’s answers start out: “Good question.” He also gets most of his news via Facebook and Twitter. And coins a new term - “Socialprise” – social media incorporated into the enterprise.
MixedInk – Vanessa Scanfeld
Founded at Cornell – politics-based. A community organizes, people participate, and they all agree on the final version of their message. Example: Slate’s People’s Inaugural Address. Ratings, user input, etc. Mashups of previously-written text – tracking authorship.
Just got word that a colleague of mine at MH was laid off. Oooooh. Literally even as we speak kinda thing.
Q for Vanessa: What’s the ROI? In fact, useful for product specs, etc. – a lot of ideas, maybe geographically dispersed, where the final text is what matters.
Q: “Why the hesitation around collaboration?” Not so much of a hesitation around collaboration – she’s got a hesitant style.
Prolifiq – Jeff Gaus –
Saas, enterprise content/large organizations. Content at the fingertips of the sales people. Getty Images uses it to sell photos. Corbis/ONYX uses it to go after expired licenses. Cisco. Medical device space – Atricure. IBM.
Q: “Is it a product or a feature?” This kind of question is an indication of one of two things: Either your presentation failed, or the person in the audience didn’t get it.
Q: “How do you determine the effectiveness of the content?” An algorithm. Oooooh.
Q: “How do you make money?” “Classic Saas model – butts in the seats licensing.”
Refreshments and networking – well, that was lovely – must remember to BRING MY BUSINESS CARDS tomorrow (D’oh!)
SBTV – Susan Wilson Solovic, CEO – did she work in radio or TV?
Small Business Daily Newscast – events calendar, video content, podcasts, internet radio – Suze Orman, et al
She calls herself the “Suze Orman of small business” – okay, that is unfortunate. 96% direct traffic, 13K viewers per day.
Ad-supported content.
Working on a massive SEO project. Hampered by the fact that search engines for a long time didn’t track video.
Adgregate – Henry Wong, CEO
Had to miss this one.
Associated Content – Andrew Snyder
Syndicates content and shares ad revenue. Now creating original custom content.
Oh, no, content as a way to get people to buy things! Zappo’s! Um, we did this at Barnes & Noble and the program was terminated because IT DIDN'T MOVE ANY BOOKS. And we lost a ton of $ in licensing fees.
Professionally-reviewed content – as opposed to crowd-sourced content generation.
Questions: “How labor-intensive is the quality?” Very.
Content is work-for-hire – so they own it.
Q: Competitors? The usual answer – there is nobody doing what we do right now. Their differentiator – they deliver content both on their sites, as well as to other sites.
Q: Video content? About 10% of their content is video.
Q: How do you vet 200K contributors? 2000 submissions every day – Because they are paid, they can vet them. Both tech- and human-reviewed. Not telling how, exactly.
Management CV – Renny Ponvert ()
Oh dear. The cold meds have kicked in. I hardly understand this one.
Apparently they have a database of CEOs, where they rate them and segment them. And create textual commentary.
CellJournalism – Parker Polidor
Local media outlets. License to local outlets – user generated content – from cell phones, Bberries, etc.
Platform. Local media rec’s images. Media outlets have to monetize this somehow.
40 clients. Business model – setup fee, then license platform.
Q: “Do you do consulting, advising companies on how to leverage community content?” “Kinda. We have best practices.”
Q; “What about rights/permissions” – local media outlets provide their own terms of service.
Roger Ehrenberg – Managing Partner, IA Capital Partners – Keynote
Failures are the topic of the keynote. “How to ‘Fail Successfully’” in other words. Using his own experience.
Using his own experience at several different companies.
“Showing a unified face” is different from “having a single vision”
Managed a team not used to interacting with customers – oy! Not customer-centric!
Got hyped early on. Raised a bunch of money, but had no idea how to even spend it.
Too much money – didn’t need to make revenues. He’s almost speechless with the irony.
Persistence. Not letting failure “get” to you. Not letting it demoralize you.
What I offer:
