Archive for the ‘Company Profile’ Category
Friday, December 7th, 2012
By Allan Maurer
Joe Davy, CEO of Buystand, which lets buyers set a price for active lifestyle products they want to buy.
Deals, deals, deals: discounts are the byword of online shopping these days, but usually, sellers are deciding how much the discounts should be. A Durham, NC-based startup, Buystand, wants to change that.
Buystand, says CEO Joe Davy, “Is the world’s first completely buyer-driven marketplace for active lifestyle clothing, equipment and footwear.” That includes everything from boots to mountain bikes and skis.
“Originally the brainchild of Ted Kraus and commercialized by Ted Kraus and Bill Brown at 8 Rivers Capital, which Davy says “works like an incubator for ideas, going through the patent process and funding them,” Buystand launched in beta about a month ago and already has hundreds of retailers, 250 brands, and thousands of customers signed up.
Davy, who joined the company after taking a course Brown, who is managing partner at 8 Rivers, taught at Duke University Law School, presented the company’s business plan at the Startup Summit that preceded this year’s Internet Summit in Raleigh, NC in November.
Innovative companies from early stage to pre-IPO looking for funding may want to apply to present at TechMedia’s next event, The Southeast Venture Conference in Charlotte, NC, in March. SEVC is now accepting applications.
Davy explains that at Buystand retailers let the buyer tell them what they want pay for certain products. That lets retailers see what their products are worth to buyers and lets brands see what they’re worth compared to their competitors’ products.
The retailer can decide at what price it wants to sell.
Control in the hands of buyers
“It puts control back into the hands of buyers,” says Davy. “There has never been a company before that let buyers come in and say what they’re willing to pay for a physical product, although it does happen in the hotel and travel markets. We’re inventing that model for products.”
Davy says this startup differs from many others – including the last one he ran – solve “What amounts to a big problem for a small number of people. They’re building a better widget or solving a very niche problem. What we’re doing appeals to a universal desire. It’s a much better way to shop, not just for a few people, for 90 percent.”
Customers already seem to like it. “People are using this multiple times a month. They’re not only happier when they pay the price they want to pay, but it translates into them spending substantially more money,” he says.
The firm has lots of room to grow. “It’s an $83 billion market,” Davy says. “And no one else is being innovative in the space right now. A lot of people are doing daily deal sites, but those crush brand equity and undermine the future sales of retailers.”
There are plenty of places to buy used products, he notes, including eBay and Craig’s List. “Buystand is for people who want a brand new product from retailer but don’t want to pay full price,” he says.
People have adopted it quickly, he adds. “We saw traction in just a few weeks,” Davy says.
Friday, February 24th, 2012
By Allan Maurer
What are the dominant buzz words in today’s digital marketing world? No secret there: mobile and local. Atlanta-based LSN Mobile, which has relationships with more than 200 local TV stations and newspapers, giving it the largest local mobile inventory in the country, stands to benefit from both trends.
“The year of mobile has finally arrived,” says LSN Mobile CFO Neal Miller. “The industry estimates that mobile advertising will hit $3 billion in 2012, a significant increase over the last few years and the fastest growing advertising segment. We feel that with our locally focused inventory and very large publishing network, we’re well positioned to capture a significant share of that.”
Shifted focus in 2005
Founded in 2001 to provide Internet marketing services to broadcast stations and newspapers, the company shifted its focus in 2005 to selling local mobile marketing solutions.
Bootstrapped initially, the 31-employee firm raised a “super angel” round of $1.2 million and is looking for growth capital in the $3 million to $5 million range.
LSN Mobile enables local media and brand advertisers to extend their reach to the mobile consumer market via their handset. It has the nation’s largest network of local television news content, in both English and Spanish, currently offering news, weather, sports and more to more than 30 million mobile users.
Through its Direct Mobile Marketing & Advertising Group, LSN Mobile helps companies rapidly deploy direct mobile marketing campaigns to mobile users via text messaging, rich media content, and interactive mobile marketing campaigns across all wireless carriers and handsets.
LSN Mobile’s “Local News, Weather and More” mobile apps for Android, iPhone, and BlackBerry platforms are among the top ten free downloadable local news applications.
Presenting at SEVC
It is one of 60 innovative companies presenting at next week’s Southeast Venture Conference in Tysons Corner, VA (Feb. 29-March 1). The event sells out each year and is nearing a capacity audience.
LSN Mobile has about 300 customers and currently reaches 20 million consumers on mobile devices who account for 400 million monthly pageviews.
What distinguishes the company from many others focused on local mobile marketing is “The breadth of our relationships with local broadcast stations and newspapers. We can target mobile advertising down to the metropolitan area. That means advertisers can target who they want to geographically.”
So, Miller explains, “If you’re selling flashlights and batteries and want to market in a storm area, you don’t need that ad in Florida in the winter, but rather in the Northeast.”
The company sells its ads via its newspaper and TV station network, giving them a cut of the revenue, acting as a sales arm for them.
The company also offers a series of text message based systems for mobile offers, coupons, text-to-vote, and other uses.
“We’re one-stop shop for brands and advertisers who are looking to deploy locally,” says Miller
LSN Mobile works with Sprint, Verizon, AT&T and its customers include ABC, Fox, LG, Rackroom Shoes, Vertis, Infogroup, and other ad agencies, among many others.
Monday, October 10th, 2011
By Allan Maurer
Zack Urlocker, COO, Zendesk
When Groupon signed up with San Francisco-based Zendesk, which sells a web-based help desk service, it employed only 10 people. Today, the company still uses Zendesk and has 2,000 people using it now in a dozen different countries. Groupon is only one of the high profile online clients using Zendesk.
Others include Hulu.com, the blogging service Tumblr, and the file sharing service, Dropbox. Clients also include Sony Music, Open Table, Sears, and Adobe.
The company was founded in Copenhagen by three software industry veterans in 2007. The 120 employee company has global offices and boasts 4X growth from 2009 to 2010.
The venture-backed company raised capital from Charles River Capital, Matrix, and Benchmark Capital.
Zendesk COO Zack Urlocker tells us the cloud-based service, which costs from $9.99 a month for a starter program up to $99 per agent for the Enterprise version (with annual discounts available), solves a number of help desk problems for its clients.
“We’ve all had that help desk experience where they tell you that’s a different team and you have to tell your story all over again.” Can you think of a few times that’s happened to you? I certainly can.
Zendesk eliminates that problem by making sure each successive agent all of the caller’s information.
It also lets agents handle service requests through multiple channels, such as email or a portal (such as Tumblr’s). It has voice capabilities for online service chat.
It tracks a fair amount of data and includes 20 built-in reports and dashboards that provide analytics. Those include the ability to see when queries are coming in – hours, days, months.
Like many types of software once only available to Enterprise sized businesses due to their cost, making Zendesk available in the cloud is what makes it more affordable to businesses of all sizes.
“Customer experience software used to be expensive,” admits Urlocker. “It required six months to implement and cost half a million. We’ve made this affordable to smaller companies. Some of those might grow into a Groupon or an Open Table, but everyone should be able to get good service.”
Thursday, July 21st, 2011
By Allan Maurer
New takes on the social network meme pop up almost daily. URVEW, founded in January this year and currently only available to colleges and universities (you need a .edu address to sign up), is the first video micro-blogging site. The company launched just prior to Tech Media’s Digital Summit in Atlanta where it was a demo company earlier this year.
“Our goal is to connect the world thorugh video communication,” explains Co-founder and CRO Travis Potter. “Current social networks are not personal enough. Video is the best way to get across feelings and your overall self.”
The company, self-funded with one angel investor, is currently a web-only platform that plans to make money with an advertising model. It will eventually also do mobile apps, Potter says. “We may do a premium model. Right now, videos are limited to 20 seconds or less. We might charge a bit if people wanted to make longer videos.”
We checked out the site and found it still a bit underpopulated, but Potter says they’re gaining users steadily and once it’s open to the public, more are expected. The sound seemed a bit rough on the videos we watched, mostly people just chatting a bit.
Potter says he conceived of the site three years ago. “People thought it would be boring, so I put it on a back burner,” he says. “Then, driving back from DC with my partner, Josh, (Josh Clark, co-founder, CFO), we were talking about celebrities and all the exposure they get and the idea came back, the name, the features, all at once.”
One thing making the site different from posting a video on Facebook or Tumblr, Potter says, is that “You have a live count, how many people are viewing you in real time.” That might be useful to a politician running a campaign or other commercial users, he says.
With the aid of Clark’s business skills and friends, now part of the company with tech design skills, they created URVEW.
Currently headquartered in Lynchburg, VA, where the team attended Liberty University, the firm plans to move nearer to DC, Potter says.
The site should be open to the public soon.
URVEW is seeking a seed round of at least $100,000, he says.
Thursday, June 30th, 2011
By Allan Maurer
ATLANTA – People talk a lot about the way software-as-a-service (SaaS) has enabled many businesses to afford technology that only the largest firms could buy under licensing models. But the other side of the coin is that SaaS also makes creating a technology company much easier and less expensive. “We would still be in the garage if not for the SaaS revolution,” says Steve Bachman, CEO of Atlanta-based AuditMyBooks.
Instead, the company, founded in 2008, helped small businesses scan nearly 1.9 million QuickBooks transactions for fraud or errors in the first two months of 2011, saving its customers nearly $12 million, the company says.
Bachman explains, “The AuditMyBooks Analyzer scans QuickBooks for more than 20 different warning signs of errors and fraud. Assuming you could run the same 20 tests manually at the rate of 1 transaction analyzed every 5 minutes, it would take more than 157,000 hours to analyze 1.9 million transactions which represent a cost to businesses of almost $12,000,000.”
Accounting errors common in small businesses
Accounting errors are unfortunately quite common in small businesses. Sixty percent of such errors result from simple bookkeeping mistakes or misapplication of easily understood accounting standards. Although unintentional, mistakes can still lead to bigger issues like penalties from erroneous tax filings.
Fraud is also an ongoing problem for small businesses in the U.S. The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose 5 percent of their revenues to fraud, and small companies represent more than 30 percent of all fraud cases. ACFE research also shows that small businesses suffer the highest median losses of any sized company at nearly $150,000 per occurrence.
Repurposing security tech
The company, funded by the management team and grants from teh National Science Foundation and SBIR grants to the tune of $180,000 with another $500,000 Phase II grant in progress, was started by a group of tech execs who had worked together and had a variety of skills and experience, Bachman says. They have combined experience in financial systems, information security, spyware, intrusion detection, and content filtering and management.
They asked themselves, “Why can’t some of this technology used for identifying threats in information security be used in other ways?” They indeed found that they could use some of that forensic technology on financial transactions instead of file downloads or web transactions.
Then they asked themselves that other ultra-important question of the successful entrepreneur: what market is underserved?
It certainly isn’t large enterprises, Bachman says. “They have lots of resources and money and they get everything,” he notes. “But we saw a monster hole in tools and technology to protect small businesses. They have a need that lacks a good solution without an expensive and time-consuming end-of-year audit and review.
“It’s a $944 billion a year problem affecting 30 percent of all small businesses,” Bachman says.
So, when Intuit, which makes QuickBooks, which owns 71 percent of the small busines accounting market, introduced the Intuit app center, the AuditMyBooks team saw a big opportunity – 4.5 million QuickBooks users looking for complementary solutions.
AuditMyBooks standalone app is cloud-based and connects to QuickBooks via the Intuit app center, so Intuit is handling all the hosting.
“We’ll enhance the product over time,” says Bachman, who adds that the 12 employee company may seek growth funding toward the end of 2011.
Tuesday, May 10th, 2011
By Allan Maurer
DURHAM, NC – How do you get Google employees to move to Durham, NC and join a startup? Persistence worked for Spring Metrics, an analytics company that helps e-businesses understand what drives their revenue online. The company has signed two former employees of the search engine giant, a former product manager and an engineer.
“We didn’t actually look specifically for people who worked at Google. We were just looking for people we think are the best out there,” says Doug Kaufman, co-founder and CEO of Spring Metrics. But, he adds, “It does make the interview process easier knowing that Google puts them through the wringer.”
Google is known for its rigorous and daunting employee interview process.
Shannon Bauman, the former Google project manager, for instance, was asked: How many tennis balls fit in a 747? Why are manhole covers round? What is the air speed velocity of an unladen swallow?
Bauman was at Google’s Mt. View headquarters for most of his four years with the company, but spent a few months at its Chapel Hill office prior to co-founding Spring Metrics. “There were a lot of smart people at Google,” he says.
“It was a shock to be in an environment with so many people smarter than me. It was daunting at first, but you learn to value it. There is a very open and collaborative environment there that helps foster the ability to get information from other people’s brains and make better products.”
Bauman says that when he started at Google, “It had 2,000 people. Four and a half years later, it’s 20,000 people. I was really more interested in working with smaller companies. I figured I’d learned a lot at Google, but the the things I’d keep learning by staying there were not as important as those I would learn by going to a startup. I thought of doing one myself, then met Doug and joined Spring Metrics.”
Networking paid off
He notes that he did a lot of networking when he first came to the area and “The Google name got me through a lot of doors.” At a Southern Capitol Ventures brunch, Jason Caplain introduced him to Kaufman.
“I love the Triangle,” he says. “The people the greenery, the space. It has so much going for it.” He admits, however, it is a bit harder to do a startup because there is less venture capital and angel money and fewer engineers than in Silicon Valley. “The more people you have in an ecosystem, the more things happen. California has ten times more people.”
Spring Metrics got its start with Launchbox Digital, the only Southeast accelerator to make a list of the top ten in the U.S., recently, then nabbed a $635,000 seed round from LaunchBox Digital, CBC New Media Group, Zelkova Ventures and Steve Vanderwoude and Lee Buck. The company’s product simplifies Web analytics to show only the data affecting the bottom line. It lets users see what is driving revenue and how they can actively generate more conversions.
Kaufman says that “If it were not for LaunchBox Digital, we probably would not have started this. Because of it, we knew we would have a much better chance of getting funding.”
A startup can do what a big company can’t
The company also set its sights on a Google engineer, Patrick Scott. The firm started talking with him at a very early stage, but as he saw where the company was going, “He realized it wasn’t going to fall off the map in five days,” says Kaufman. “So he got more comfortable and excited about a startup.”
But there was one other piece that worked in Spring Metrics’ favor. “There is something a startup can do that a big company can’t,” says Kaufman. “That is to really show someone how valuable they are. For us, pursuing this engineer, he knew we could only hire one guy. We showed him and told him how valuable he would be to us. We didn’t want just any engineer. We wanted him.”
That, he notes, “Goes a long way with people.”
Kaufman says the five-employee company is working on taking its product to another level. “We’re going to make this more useful, bring on another marketing person and bring on customers,” he says. While the firm is not looking for additional backing right now, “We will be,” says Kaufman.
Wednesday, March 16th, 2011
By Allan Maurer
ORLANDO, FL – FindVenture.com, an Orlando-based Internet company has just launched its site, which connects entrepreneurs and startups with investors, but already has five deals in term sheets and expects to see its first deal close by the end of the first quarter.
Founded in 2010 by David Bayer, CEO of DataBanq and of ChamberofCommerce.com and a founder of Chamberperks (2002), a web-based group buying program in Flordia, and Seth Ellis, managing partner of the $450 million Florida Mezzanine Fund, the site is free to both investors and entrepreneurs. DataBanq and the FMF funded the project.
Investors can pay a membership fee for increased deal flow and more sophisticated deal matching/searching features.
“Entrepreneurs and CFOs are turning to the web to find investment and lending resources,” said Bayer, managing partner of FindVenture.
“What they are finding is that most investors are still operating offline and seeking deal flow by utilizing traditional methods. FindVenture.com brings both the investor, or fund, and the business owner or entrepreneur into a more efficient marketplace exchange.”
Using a sophisticated matching algorithm, FindVenture connects investors with individuals and organizations. “Eliminating the need to filter through investment opportunities that don’t fit the core criteria of a fund saves both the investor and the business a tremendous amount of time,” said Bayer. FindVenture.com provides detailed profiles of both funds and prospective investment companies, in addition to a platform and subscription model similar to Monster.com, where like employers; investors have access to view prospective investment opportunities.
Bayer tells us, “Our focus is on creating enough deal flow that we can attract a senior management team and raise money to deploy to the deal flow as a venture fund. Similar to what Lending Tree has done by starting off in mortgage lead generation and then eventually becoming a mortgage underwriter themselves.”
The five-employee firm has more than 50 funds/investors registered on the platform in just its first 30 days.
We asked Bayer what differentiates the company from others in the space.
“We are in a unique position,” he said, “in that we have no immediate need to make money off of our customers. Our model – instead of needing to make money off of investors, entrepreneurs or the connecting of the two – our focus is simply deal flow.”
He added, “In partnership with Acxiom and ChamberofCommerce.com, we have a direct communication channel to more than 14MM businesses. Using a sophisticated algorithm we are able to identify those businesses which are likely to need and qualify for funding and approach them directly to participate in our platform. The net result, higher volume and quality of deals in the system and a fraction of the cost of most other companies in the space.”
. When a business posts a funding request on FindVenture.com, they put their idea and business plan in front of thousands of investors and funds. Additionally, FindVenture provides small businesses and entrepreneurs with the resources and education to find the fund that’s the right fit.
FindVenture’s resources section provides insight into the fundraising process with articles written by industry leaders such as Karen Klein – an expert in small businesses and entrepreneurship who has appeared in Bloomberg Business Week and the Los Angeles Times for more than a decade.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Friday, February 18th, 2011
By Allan Maurer
ORLANDO, FL – Getting airline profits off the ground is tougher than one might expect, considering how essential air travel is to our business and personal lives in the modern world. But airlines large and small have gone belly up because they couldn’t land enough paying passengers. Radixx, a software firm in Orlando, puts some jet fuel in airline profits.
Ron Peri, founder and CEO of Radixx, tells us that building an advanced airline passenger service system is a complex endeavor that defeated several major players who spent hundreds of millions and years trying. “There have been a lot of attempts to build this type of software that failed,” says Peri.
Radixx itself only succeeded by doing it incrementally over many years, he says at a cost of about $50 million.
A myriad of problems have to be solved: chief among them, getting the airlines specifications and working with legacy software systems, but the whole thing is complex, Peri says. The air industry business model is in a rapid state of change. You must find a way to compete profitably in an environment where low cost structures and non-traditional business models are now the rule not the exception.
Presenting at SEVC
Radixx, spun out of a previous airline focused company in 1998, is among the 50 innovative firms presenting at the fifth annual Southeast Venture Conference in Atlanta March 2-3. And what a story Radixx has to tell.
“We have a variety of airline clients who will state emphatically that implementing Radixx Air made them profitable, more profitable, or kept them in business,” says Peri. Great Lakes Aviation, for instance, stated in a filing with the US Securities and Exchange Commission that Radixx was the reason for the company’s first profitable quarter.
Air Iceland made its first profit in 40 years of operations after installing Radixx software.
Another airline saw a 250 percent increase in bookings using the software. Go Air, which had never had more than 100,000 passengers in a month leaped to 147,000 the month it first used the product and moved to 250,000 a month.
“It’s had a tremendous impact,” Peri says. “It’s just a more effective and better way of selling.”
The Internet changed everything
The Internet changed everything for airline ticket sales just like it disrupted publishing and music sales and many other aspects of modern business. In the old days, Peri says, a travel agent would book you with the airline that gave them the best commission and you took what you got. Now, on the Internet, “Airline fares are obvious to everyone,” Peri notes.
To deal with that new transparency, which lets people find the cheapest fares quickly, airlines sell everything they can sell as services, from baggage fees to meals or better placement in line. That requires a software system that can handle constant adaptations.
Radixx has about 30 airline clients now and no two do things the same way, Peri says. “But we are at a point now where we have a product,” which he notes was far from easy to create. Now the company is looking for venture backing to help it build out its brand and sales channels.
Radixx Air charges on a transaction basis. It allows selling through any distribution channel, e-ticket or ticketless, legacy or modern.
“There have been many attempts to build this type of software that failed,” says Peri. “We’re kind of the little engine that shouldn’t have been able to but did, little by little.”
He says that if the company lands funding, the lessons it has learned creating its product give it some insight into what’s coming out of the clouds. “We could do some things along the lines of breakthroughs,” he says.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Friday, February 4th, 2011
By Allan Maurer
Kabbage, (http://www.kabbage.com/) which just planted $6.65 million led by BlueRun Ventures in the bank, is a company with one of those innovative ideas that could not have happened at a better time. The company makes working capital advances via PayPal to qualified online sellers.
Marc Gorlin, chairman of Kabbage, at the 2010 Internet Summit in Raleigh, NC
“There is no faster way to raise working capital on the planet,” says Chairman Marc Gorlin. Out of Beta for a short time, Kabbage has doubled the number of clients it had previously.
It has been making advances of from $2,000 to $12,000 and is going to move up to advances of $25,000 to $40,000 over time, says Gorlin. “If they can get access to capital, they can truly grow their business.”
The alternative method of raising capital offers online sellers another option in one of the worst climates for obtaining small business credit from banks in history.
Kabbage co-founder and COO Kathryn Petralia on the motorized beer cooler the company won at a PayPal X developer conference
This Internet thing is just a fad
“Take a company like Zappos,” says Gorlin. “They were doing $50 million in revenue before they got their first credit line from a bank. Many local companies doing $5 million or $6 million can’t get credit. A company in Minnesota referred to us was selling hardware and had a run rate of $4 million a year from online sales. They went to a bank for money to expand. The bank told them this whole Internet thing is just a fad – and that was this year.”
While traditional bankers want to walk wooden floors and see actual customers, Gorlin points out that “There is actually a ton more data online.”
Using that data, Kabbage qualifies sellers in a matter of minutes from about 200 data points in PayPal and eBay – how long a store has been online, it’s seller rating (which indicates how well they treat their customers), PayPal charge backs, volume of sales and much more. Kabbage has made advances to companies selling everything from American Indian jewelry to model trains, plus size men’s clothing, odd sized men’s shoes, china, and collectibles. “It’s a diverse list,” says Gorlin.
The companies agree to paying back one-sixth of the advance each month via PayPal and can pre-pay with no penalty. Kabbage makes from 6 percent to 16 percent of the advanced amount in fees depending on the firm’s credit history and volume. Down the road, Gorlin sees the possibility of giving online sellers a “Kabbage score” based on its data and increasingly sophisticated analytics. It can, for instance, tell over time which data points may be most predictive of small business success online.
Robert Frohwein, CEO of Kabbage, has been CEO of LAVA Group Inc., an intellectual property investment bank, a founder and the managing partner of Sentry Law Group, and founder of MediaWheel
Hold it while we check your Kabbage score
Banks may eventually use the Kabbage score to open up their own loan coffers, Gorlin suggests. “We could be the means by which banks get more money to small businesses by automating the process for them,” Gorlin notes.
Data analysis Kabbage has done for its own customers shows that “Margins for online businesses are stout. A lot of them won’t sell things for less than a 100 percent margin, they are not paying rent on a store, they don’t have shelf space to fill or need people to talk to customers. They do have different fees on PayPal and eBay, but by and large, the customers we see are running high margin businesses.”
Founded in late 2008 by Gorlin, CEO Rob Frohwein, and Kathryn Petralia, COO, the company attracted high profile investors who include David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund, in addition to BlueRun. The company says the funding will let it expand its financing service beyond eBay merchants to marketplaces such as Amazon, Etsy, Overstock and so on.
Talking to Gorlin, you can tell he gets a kick out of helping small businesses while building his own. Kabbage itself still has a classic startup culture, says Gorlin, a serial entrepreneur who was a co-founder of Pretty Good Privacy (NYSE:MFE), Vertical One Corp. and the Lanta Technology Group.
Startup culture, he says, “Is something you can’t recreate in a big company. You work the number of hours you do to create something out of nothing and you have to burn off some steam.”
So, there are nerf guns. Oh yes, and there is the motorized beer cooler. Kabbage won it as the audience choice prize at a PayPal X developer conference in San Francisco. “I guess you could put something besides beer in it,” says Gorlin, “but I wouldn’t know why.”
On the heels of its funding, Kabbage has already selected larger new offices in Atlanta and will be hiring. It currently employs eight people and expects to hit 15 or so in the next 60 to 90 days. But if you’re going by, watch out for the nerf guns.
Reprinted from our sister publication, TechViewAtlanta.com
Monday, January 3rd, 2011
By Allan Maurer
MIAMI – Online selling has natural advantages: stores open 24/7 365 days a year. Breaks on sales taxes (sometimes). The convenience of never leaving home or dealing with crowds in stores during holidays or sales. But for many retailers, it also presents a raft of marketing challenges. Miami-based Merchant Advantage sells software as a service to help online merchants, agencies and service providers deal with those business problems.
MerchantAdvantage provides the large online merchants and marketing/advertising agencies business tools to manage their marketing campaigns, product catalog feeds, and customer feedback “at a price they can afford,” the company says.
Chief Financial Officer Tom Smith tells us the company, founded in 2005, has been privately funded, but expects to look for third party acceleration funding this year or in 2012.
“Our solution helps e-commerce companies manage and distribute their products to online shopping sites and gives them the ability to manage their ad words at the product level,” he says.
The problem is that certain web sites are only really good for moving certain brands or price points. “A merchant can get slaughtered if it lists every product. You need to know what sells well at each type of site. It’s like shopping malls. Some are good at the high end, some at the low end.”
Smith says sophisticated merchants list profitably on up to 60 shopping sites – but only by putting a narrow selection of products on each one because they know what products produce results there.
For a large electronics retailer with hundreds of thousands of products with changing price points and individual models, that’s a business problem of epic proportions.
Can’t ship, goodbye Amazon
Another problem is that if a company cannot ship a product, “You get kicked off of Amazon,” says Smith. Since “You can’t predict how many people are going to click buy on an aggregator such as Shopzilla, you need a safety margin on what you can actually deliver.” That means if your inventory falls to fewer than three to five products, you might not want to list it on Amazon that day.
Trying to handle those problems via an Excel spreadsheet or Microsoft Access databases “Requires a team of people,” Smith notes. “Instead of having two or three people deal with it, one person can do it with out tool, which is a data management tool, not just a feed tool.”
The company’s Channel Management with Channel Analytics tool enables ecommerce merchants, agencies, and companies seeking data centric solutions to customize, optimize, submit, adjust, monitor, and analyze data feeds to third-party partners and any online marketing channel.
Among its features, it will help merchants and marketers manage their entire search engine marketing efforts. “It makes sure you don’t bid on products without inventory, will bid on some with higher price points for a better margin, and generate and manage Google key words. We can build all these sophisticated automatic bidding rules.”
Often, it pays to buy key words for a specific product, a specific camera model, say, than for a brand or type of camera, because then, Smith says, you catch the buyer after he’s done research and is ready to purchase.
The company is also in a position to take advantage of the mobile revolution underway.
“What does mobile e-commerce want? All your product data,” or exactly what Merchant Advantage collects from its clients.
It partners with MShopper to put regular e-commerce sites into mobile format. “It finds out what phone a user has and formats the data correctly for each type. Usability is so important to getting a conversation going on mobile,” says Smith.
The company helped an online furniture store grabbing 25 percent of their online sales from their mobile site in a month. “They’re pretty happy,” says Smith.
The company has competitors such as RTP-based ChannelAdvisor, among others.
Smith says a difference between Merchant Advantage and many of the others is “our pricing. We don’t take a percentage of sales. Our pricing is based on data load. It’s analogous to cell phone minutes. The more you use, the more you pay, but if you don’t make more money, we don’t take your money.”
He notes, it also differs because “We don’t offer a fully managed type of service. We have both a retail and a wholesale busienss. We offer a fully configured tool with all of your feeds optimized and working, but we don’t make marketing decisions for our clients. We let our agency partners help them make decisions and recommendations for clients.”
The company, which has fewer than 20 employees, sells its product fully configured starting at $695 a month and it goes up according to data use. “More than half our clients pay less than $1,000 a month,” Smith says.
Tuesday, December 7th, 2010
By Allan Maurer
CHARLOTTE, NC – For a time, the video telephone – a staple of science fiction from the pulp magazines of the 1920s to Kubrick’s “2001,” and beyond, were, along with flying cars, one of those sci-fi predictions that just didn’t happen. Now, with smartphones, PCs, and a host of other devices capable of both video and telecom along with the broadband service supporting them, that may be changing.
Alan Fitzpatrick decided to take the entrepreneurial plunge last year to form his start-up MailVu because he saw the much-hyped online and tele-video era actually coming into being as Internet infrastructure caught up with those picture-phone dreams of sci-fi.
A 22-year veteran of the telecom industry, Fitzpatrick notes, “The technology and idea has been around for years, but the infrastructure is available now for anyone to use video anywhere.”
His MailVu service, launched this year, features an easy-to-use interface that lets people record a video message of up to 10 minutes and send to anyone on virtually any device. “It’s the quickest, easiest and fastest way to send private video messages,” he says.
Fitzpatrick, CEO, and his co-founder Addy Kapur, both veterans of ACN, launched MailVu earlier this year, self-funding it. The current consumer-facing free service is partly a way to attract users and provide value, “Then monetize it when you have traction.”
The economics of creating an Internet start-up are so different from the boom years when it took millions to open a company’s doors that many entrepreneurs are following similar models. They launch with an initial product, create a user base and technology then roll out products they sell.
MailVu is no different. Fitzpatrick says it has just started selling business plans, mostly to customers who asked for a version of the company’s technology they could brand or modify for business purposes. “It’s nice when customers come to us,” he says.
MailVu was a demo company at the recent Internet Summit in Raleigh, where he says “We were pleased with the reception we got.”
Next year, Fitzpatrick says, MailVu will seek a $500,000 seed funding. “That should take us to profitability,” he says.
That’s different from the Internet boom years, too. The first Internet firm I worked for, dbusiness.com, spent $17 million in two years and still folded up when the bubble burst.
Fitzpatrick is enthusiastic about the potential for the potential of digital video. “Companies like Skype have really made the market with 500 million users worldwide and 40 percent using video. A Cisco study said online video will increase 34 percent compounded annually through 2014.
“We saw what the market was doing while at ACN and decided, ‘Let’s get into this space ourselves,” Fitzpatrick adds.
The MailVU service does have some unique features, such as the ability to recall a video or have it self-destruct after a certain number of views. “We believe there will be a backlash against the public nature of social networking,” says Fitzpatrick. “People will want privacy.”
While there is lots of talk about a new Internet bubble forming, Fitzpatrick says that may be true on the West Coast, where funding criteria are different. Here on the East Coast and the Southeast in particular, he says, “There is a more conservative approach. Here you need a good business model. User growth is great, but you need a solid business behind it to get funded. So maybe Southeast companies will have a longer lifespan because they’re build more on business fundamentals.”
As for MailVu, “What you see now is the tip of the iceberg,” says Fitzpatrick. “We didn’t design this to be a video mail company. That’s just our first product.”
Wednesday, August 25th, 2010
By Allan Maurer
Sue Harnett, CEO, founder, Replay Photo
DURHAM, NC – Sports fans have always loved photos of their favorite teams, players, games, and even stadiums. That’s one reason Replay Photos is expanding its staff and its online photo stores. It has begun adding specific NFL team photo stores and has inked deals with the Associated Press, National Geographic, Sports Illustrated, Outdoor Life, and Field & Stream, among other brands to build online photo stores.
Founded in 2003 by Sue Harnett, a former Duke University basketball All America, the company was funded by several angel investors. But Harnett says it isn’t looking for additional money. Those sports fans are providing the growth capital.
The startup now works with over 140 colleges, the National Football League, the Associated Press, and the National Collegiate Athletic Association to market and sell photography-based products to consumers online.
Since 2008 the firm saw revenue grow 150 percent and expanded from 4 employees to 15. It has several positions open now in account management, Harnett tells us.
Durham a good place for Replay
Replay offers a variety of photos such as this one of the Carolina Panthers Bank of America Stadium
Its current products include photographic prints, custom framed photos, photos on canvas, Personalized Photography and Replay Peels. Harnett says the company did more than $2 million in sales last year and expects to double that this year.
Harnett says Durham is a good place for the company to do business for several reasons.
“We are proud that our roots are established in Durham,” Harnett said. “The Triangle is a hot bed for new companies and is characterized by a unique entrepreneurial spirit. Combined with the fact that this area is populated by people who care deeply about athletics, Durham offers Replay Photos an optimum environment to succeed,” she says.
Harnett attributes much of Replay Photos’ growth to the replication of its licensed content business model across a variety of partners and brands.
“We receive calls and email messages every day from people asking about specific photos, telling us stories about where they were when an image we have was taken,” Harnett said. “As a sports enthusiast and former athlete, I can relate to this passion.”
The company just retooled its brand this week. Its next goal is to bring additional photography based-products to consumers for personal use through mobile device applications.
We think the company is a good example of how a startup can succeed the old fashioned way, by finding a product or service people want and selling it.