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Buystand puts control in the hands of buyers of active lifestyle products

Friday, December 7th, 2012

By Allan Maurer

Joe Davy

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.

 

 

Don’t wait for trouble to keep records of your business social media

Friday, August 17th, 2012

By Allan Maurer

Anil Chawla

Anil Chawla, founder, CEO, Archive Social. He’ll be talking about the need for companies to keep records of their social media activities at the upcoming Internet Summit in Raleigh, NC, Nov. 7-8.

Social media management is a hot topic right now as more and more firms enter the fray. But while many companies are addressing the marketing side of how to use social media effectively, only a few industries are thinking about potential legal, compliance and e-discovery risks.

Companies are using social media for purposes such as recruitment and customer service as well as marketing, notes Anil Chawla, founder and CEO of Durham, NC-based ArchiveSocial.

“They need to take ownership of their social media data and keep track of their communications. They need to keep records of what they’re saying and what others are saying to them,” Chawla says.

Financial services leading the way

Some industries know this. Financial services firms and others with regulatory requirements understand it’s not a luxury to keep track of their social media interactions, its necessary.

“Financial services are at the bleeding edge of this,” says Chawla.

Government agencies with public records requirements also need to keep records of their social media activities, although Chawla notes that many “are struggling with it.”

He suspects that companies punting the issue down the road may not do anything until “Some sort of incident forces them to change.”

ArchiveSocial, founded in May of 2011, sells a cloud-based social media archiving solution. Businesses can sign-up online, connect the service to their Facebook, Twitter, and LinkedIn accounts, and it automatically pulls in any account history.

The two-person company was part of the inaugural class of The Triangle Startup Factory and received an NC IDEA grant this year (2012).

Appearing at Internet Summit in Raleigh

Chawla will discuss ArchiveSocial and the need for keeping social media records at the upcoming Internet Summit at the Raleigh, NC, Convention Center Nov. 7-8, which attracts 2,000 attendees to its lineup of 120 marquee brand name speakers and panelists.

Brands represented this year include PandoDaily, Twitter, Mashable, AOL, Bing, Klout, Google, IBM and the Cheezburger Network, among many others.

IBMChawla has spent more than 10 years developing software products, including 7 years at IBM creating enterprise security software and Big Data analysis tools. At IBM, he says, “I realized I wasn’t achieving my potential. I started tinkering on the side with social media apps and the satisfaction of creating something on my own was far more satisfying.”

Although he was promoted at IBM, he finally decided it was time to “Figure something out and start a company.”

He decided it was a good time for ArchiveSocial, because many of the available solutions were cumbersome work arounds compared to what his company’s technology does.

“Facebook and Twitter and LinkedIn are not in the business of keeping your data available to you forever,” Chawla says.

Every established company should keep social media records

And once you move beyond regulated markets such as financial services, there is the whole issue of potential e-discovery is a company is sued. “Social media is being requested more often,” in e-discovery,” he adds.

“Just from a legal standpoint, every established company on social networks should be proactive about keeping records,” he says.

Why? Suppose a customer “Creates a storm on social media and then deletes everything he posted? Then you can’t prove your side of the story because you don’t have the records,” Chawla says.

For companies, on the other hand, once something posts on social media, “You have broadcasted it to the world,” says Chawla. “Even if you delete it, someone else may have it.”

ArchiveSocial’s key differentiator

The key differentiator between ArchiveSocial and its competitors, he says, “Is how we capture the data. We do a 100 percent authentic capture. A lot of others claim to archive social media, but none are doing it well. Many of them just use web page archiving tools, which just take a snapshot of Facebook and Twitter. It’s like taking a picture of your gmail and calling that email archiving.”

That means users can scroll through their walls or history, see comments, and search by person, discover who sent a message and where it was sent from, and more. “It’s a powerful search feature,” Chawla says.

Data from a search can be reproduced in a Pdf or Excel file.

“We focused a lot of effort on providing easy-to-use tools to manage search and produce data when necessary,” he says.

Chawla says the company is just beginning to ramp up marketing with a more public launch, although it already has paying customers.

The company may seek additional funding later in the year.

 

Socialvest makes it easy to donate to causes, boosts brand loyalty

Friday, August 10th, 2012

By Allan Maurer

Most of us like to do good when we can, but many of us don’t have a lot of disposable cash to donate to worthy causes. Atlanta-based Socialvest makes giving not only easy – it doesn’t take the money out of your pocket.

Founded in 2010 and launched in the fall of 2011, Socialvest is a cause-based shopping platform that lets members earn money in a Giving Account that can be donated to any combination of more than 1.5 million registered non-profits in its database.

They do it using a browser app or the new iPhone app. Apps for other mobile devices will be available in the future.

Even little amounts are meaningful

“When someone makes their first purchase and sees money in their Giving Account, they get so excited, even if it’s only $3,” says Founder Adam Ross. “These little amounts you pick up along the way are meaningful.”

The money comes from the companies members buy from and doesn’t cost them anything extra. Amazon, for instance, gives the customer 4 percent back for his Giving Account.

Ross says that after a friend started a for-profit to help homeless women, he realized “You can build something that does good and makes money.”

He notes that “Everyone has something they care about. Socialvest makes it convenient for people to invest in social good.”

What do the brands get out of it?

An alternative to “disloyalty platforms”

“They get social promotion and loyalty,” Ross says. As opposed to say, Groupon, which he calls “a disloyalty program.” Offering the cheapest haircut or sushi deal is not the way to build loyalty, he says.

“We think that’s bad for retailers, particularly smaller ones.”

On the other hand, he says, data suggests people want to support causes they care about. “We have a platform that lets them do that.”

The company weaves its platform into social media so members can let their social networks know when they’ve made a contribution – which also gives the brand social exposure in a good light. “It’s true ambassadorship for brands,” Ross says.

SocialVest, meanwhile, gets “really interesting data,” he adds. “Big shops and boutiques all want to provide one-to-one conversations and personalized experiences. The data isn’t personally identifiable but its good aggregate data.”

Ross says the firm is also looking at how it can help brick and mortar retailers and expects to roll out a non-profit fund raising product at some point.

The five-person company raised a second round in May from Bluff Point Associates of Westport, Connecticut, bringing its total venture backing to $2.3 million.

The Socialvest team includes Allen Graber, who focuses on partnerships and operations. Graber most recently worked with ShopVisible and Ignition One in online and search marketing. Graber has invested in several early-stage companies and served on various boards, published a blog on Facebook commerce, and is co-owner of the Octane Pocket Bar.

Tom Wessling has 25 years in sales and marketing, including loyalty and interactive marketing.

Charles Campbell is a 10-year veteran software developer who worked with Boeing, Booz Allen Hamilton, Cisco, and other firms.

Marketing and brand strategist Julia Lavine led development, web strategy and the interactive marketing program, including search, email, mobile and social at the Atlanta Journal-Constitutuion.

 

Run your own campaign with Political Rampage from 519 Games

Thursday, June 28th, 2012

By Allan Maurer

Political Rampage

A screenshot from the Political Rampage game.

So, what sort of video games would a company founded by two news focused organizations create? Why, games that trade on current events such as political campaigns and debates, says Lloyd Melnick, CEO.

Melnick, previously worked with Disney International and helped launch social gaming firm Merscom in 1993 (which later sold to Playdom, which itself sold to Disney) says that 519 Games builds on its connections to its corporate backers, Raleigh, NC-based Capitol Broadcasting and E.W. Scripps.

“The idea that drove formation of the company,” Melnick notes, “was how can we take what we do well – news, reality TV – and bring it to social gaming.”

The social gaming firm launched in August 2011 and is up to 16 employees. It recruited staff from top gaming firms, including Disney, RealNetworks, Turbine Entertainment, Microsoft, Playdom, Emergent Game Technologies, Oberon, Merscom and Research in Motion.

519 team

The 519 team.

Melnick says it’s helpful to be in The American Tobacco Campus in Durham, NC, because the Research Triangle is a gaming hub that includes other firms such as industry leader Epic Games and many smaller companies.

“We hope to be up to 25 people by the end of summer,” Melnick says.

About half of 519 Games creations are for Facebook, although Melnick admits that’s not as hot a venue as it once was for social games.

“Facebook changed the rules and you can’t send people as many requests as in the wild west days. It’s more challenging to bring in users.” Despite that, “Game playing on Facebook is still very robust according to the numbers. People are still playing.”

Mobile is the future

Mobile – particularly tablets are where games are going, he says, however.

“I don’t go anywhere without my iPad,” he says. “It’s almost attached to my body. Mobile and tablets are definitely the future.”

The company just launched its first game, Political Rampage. “It tries to interest people in the political process,” Melnick says. The iOS version is out now, the Android version is coming within weeks.

Political RampageGamers assume the role of a famous current political figure from Mitt Romney to Sarah Palin and run their own political campaign, including debates, eventually against the President. But not President Obama.

The President considered the greatest debater, Abraham Lincoln (although he actually lost his debates with Stephen Douglas if you go by who won that election).

And what does that odd company name 519 Games mean?

“It’s the distance between the company’s two headquarters, Raleigh and Cincinnati, Ohio,” Melnick says.

In the mood for love? New Digitalsmiths video search taps your mood

Thursday, June 21st, 2012

By Allan Maurer

DigitalsmithsEver settle back in your easy chair or on the sofa, scanning your movie options and think, “I’m in the mood for a love story.” Or an inspirational film? Or scary movie? Well, soon, you may be able to search for entertainment that matches your mood via cable set-top boxes or TV connected devices.

Durham, NC-based Digitalsmiths, which has developed personalized video discovery technology has added mood-based recommendations to its “Seamless Discovery” platform.

The company has cut a deal with a tier-one cable provider to include its discovery technology in new set-top boxes which may start appearing in homes by August.

The company says it has a vast database that leverages the world’s largest collection of scene-level, time-based video data from Digitalsmiths and industry-standard data sets from Tribune Media Service (TMS) and other 3rd parties.

Digitalsmiths CTO and co-founder Matt Berry tells us the company uses both quantitative and qualitative metrics to test its recommendation algorithm. “We can look at what the customers consumed in the last four weeks and correlate that with the recommendations we would have made, then measure the error rate.”

Also, he adds, “We do random sampling and have 1,000 subcribers (their identities unknown to Digitalsmiths) rate our recommendations, regardless of how they consume the media.” In recent measurements, the company’s recommendations were well received by 95 percent of consumers, he said.

Social buzz also considered in recommendations

While Berry sees mood recommendations as important, they are not the be all and end all of getting timely, well-received suggestions to consumers, he says. “We blend it with things such as the consumer’s behavior – what they’re watching or tend to DVR, what’s going on via social buzz – measuring through Twitter and other social media.”

One of the problems with recommendations, he notes, “Is that they tend to become stale if they just rely on historical ratings (such as on Netflix or Amazon).

“Twitter is an example of how dynamic TV shows can be. In sports, for instance, a quick recommendation that a tight game is tied in the last two minutes – that’s one type of recommendtion we’re trying to hit for our consumers.”

Digitalsmiths powers the personalized search and recommendations on M-Go, a free app embedded in a variety of coming consumer electronics, including:

Intel: M-GO will be available on Intel Ultrabooks devices through Intel AppUpSM center, bringing high definition, premium digital content for television, movies, music and apps to Ultrabooks and other Intel-based devices enabled by Intel Insider.
•  Samsung: M-GO will come pre-loaded on Samsung’s 2012 Smart TVs and Blu-Ray Disc players and will be accessible on Galaxy tablets. Additionally, with M-GO while watching a movie on the TV, you can simultaneously get bonus content, such as deleted scenes and games on connected Galaxy devices.
•  VIZIO: M-GO will come pre-loaded on VIZIO’s televisions, tablets, Blu-Ray players and stream players that are part of the VIZIO Internet Apps Plus ecosystem, offering consumers the ability to easily access their library of content across devices.

The big play is advertising

Founded five years ago, 50-employee Digitalsmiths raised about $30 million in venture backing. It has also received investments from strategic partners such as Technicolor and Cisco. It’s not actively seeking additional venture backing, Berry says, “But we’re open to discussions with strategic investors.”
It generally sells its product on an SaaS model, but that doesn’t work for every industry. The company is looking at other uses for its recommendation tech.
“Ultimately, the big play here is advertising,” he says. “If you can make a relevant entertainment recommendation for a user, you can do the same for products. And advertising powers the large majority of film and TV today. That’s definitely an area we’re working on.”

The year of mobile has finally arrived and LSN Mobile is ready

Friday, February 24th, 2012

LSN MobileBy 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

Sevc 2012It 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.

Is the resume an outdated hiring tool? Unrabble says yes

Thursday, February 23rd, 2012

UnrabbleBy Allan Maurer

Is the resume an outdated and increasingly less effective hiring tool? Startup Unrabble thinks so, and CEO Kevin Watson says his company’s cloud-based software leverages social media to provide potential employers with much richer profiles of job candidates.

“That way they can focus on exactly what they’re looking for,” Watson says.

Founded in 2009 by Watson, Chris Rickborn, COO, and Marc Slack, CTO, Unrabble has closed a $3 million round of funding in 2010 from C/max Capital and Morgenthau Ventures.

It is one of 60 innovative tech firms presenting at the Southeast Venture Conference in Tysons Corner, VA, next week. The event is nearing sell-out capacity.

Unrabble is looking for between $3 million and $5 million in growth capital.

We’ve seen quite a few firms attempt to update the hiring process for small to medium-sized businesses that do not have the financial clout to hire recruiters or staff large human resources departments. But, Watson notes, “We’re the only non-resume-based system of this kind.”

Its major competition, he adds, is from traditional applicant evaluation systems – typically an in-box full of resumes.

The company evolved after Watson and the other Unrabble founders left identity verification firm Verid when it sold to EMC in 2007 where Watson was chair and CEO. Prior to Verid, Watson founded C/max Capital, where he led investments in Verid, which raised more than $20 million in equity backing.

Watson also served as acting CFO at About.com, leading its $86 million initial public offering.

Find a need and fill it

Watson says that when his team left Verid, “We started talking about what to do next. We realized that we had put together a terrific team, but if we wanted to hire someone, we had to spend days looking at resumes or pay a recruiter thousands of dollars. We looked around for a better solution, but there really wasn’t anything.”

What does a good entrepreneur do when there is a need and no solution? Create one.

“We saw the explosion in social media profiles,” Watson says. And thus, Unrabble was born.

“Hiring is one of the problems that is uniform across industries and stage,” he points out, “but large companies have HR departments. Smaller ones are stuck with the outdated resume process that can be painful and costly in terms of both time and money.”

Since the Unrabble team were not HR pros, they were not constrained by traditional hiring processes. “We just wanted a better way to manage it,” he says. “We want it to be an incredibly intuitive process anyone can use without training or implementation, from a VP of customer service to mom and pop firms with a handful of employees.”

Feedback on the product has been excellent, and the company already has more than 1,000 employers signed up. “We focus on the employer,” Watson says, “but they can post jobs wherever they want, all their social media sites, job boards, their own site, email. Candidates are directed via a link to a white label page where they submit their profile, which can be from LinkedIn, Facebook, or done from scratch.”

Unrabble offers a free plan, a $29 a month plan, and a $49 a month plan – each based on the number of active jobs and selection of features.

Here’s a video demo of how it works:

What do Tumblr, Hulu, Dropbox, and Groupon have in common?

Monday, October 10th, 2011

By Allan Maurer

 

Zack Urlocker, COO, Zendesk

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.”

 

 

Urvew launching first video micro-blogging social network

Thursday, July 21st, 2011
Travis Potter

Travis Potter

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.

AuditMyBooks helps protect small businesses from QuickBooks errors, fraud

Thursday, June 30th, 2011

By Allan Maurer

AuditMyBooksATLANTA – 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.

 

 

Two former Google employees prefer the startup scene at Spring Metrics

Tuesday, May 10th, 2011

By Allan Maurer

Shannon Bauman

Shannon Bauman

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

Patrick Scott

Patrick Scott

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.

 

 

Redeemio collects all the local deals and coupons on one site

Tuesday, March 22nd, 2011

By Allan Maurer

RedeemioRALEIGH, NC – The local deals and online coupon space may save consumers money, but they’re almost too much of a good thing. There are too many of them playing in the space, not just Groupon and LivingSocial, but hundreds of smaller firms and websites offer a myriad of savings on local restaurant meals, events, a variety of services, groceries and way too many spas. Raleigh-based Redeemio brings them altogether on one site – and let’s you specify the types of offers you prefer and also learns what you like from your later choices.

As someone who uses some of those services occasionally, we thought that sounds like a good idea. Reedmio, founded in June 2010, isn’t alone as a daily deal and coupon aggregator. Yipit and Dealmap, which just signed a partnership with Microsoft’s Bing search engine, are its top competitors, and more are likely.

Redeemio Co-founder Chris Leithe tells us the company, founded in June 2010, already has good traction. Bootstrapped by its founders, the three-person company is in 120 markets in the U.S., including all of the tier one and tier two and a lot of tier three cities. It’s looking for some growth funding in the $250,000 to $500,000 range, not the easiest bracket in which to raise money.

It makes money as an affiliate of the deal firms it aggregates, taking a small percentage of each sale, but Leithe says it is looking at additonal revenue streams.

Users sign up very easily at the Redeemio.com site and can fill out a form identifying the types of offers they prefer or simply go to all the offers near them. Ours for today included three restaurants and…hold your breath…a spa. Still, we grabbed several book deals from various daily deal purveyors in the past and we expect to try some new restaurants this way too. So it is handy to see everything of interest to you in one spot.

Leithe says he expects to see some additional consolidation of the local daily deals space, with Groupon and LivingSocial already making acquisitions. In the deal aggregations space, though, he says he expects more competition to enter the market before an ensuing fall out with mergers and acquisitions.

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

 

Meebo seeing success in extending social across the web

Monday, March 21st, 2011

By Allan Maurer

Martin Green

Martin Green

MT. VIEW, CA – Where do you get your suggestions for movies or music you might like, a restaurant to try, or a new video game to play? Most of us always got the recommendations we trust most from friends. These days, most of us online get still get them from friends, but via Facebook, Twitter, email and other digital social connections. Meebo extends that online friend network across all of your web and mobile experiences.

Meebo enables users to share content and communicate in real time with the people who matter to them, connecting people to their friends on the numerous websites that have installed the Meebo Bar, through mobile devices and via Meebo Messenger.

Martin Green, chief operating officer of Meebo, says Meebo currently has 78 million unique users in the U.S., 165 million worldwide and a syndicated toolbar that runs on about 8,000 web sites.

Founded in 2005, Meebo has raised  $70 million from investors who include Sequoia Capital, Khosla Ventures, Draper Fisher Jurvetson, JAFCO, Time Warner and KTB.

Persistence of the experience important

Green acknowledges that the company has competitors attempting to unite users’ digital social experiences. The differentiator at Meebo, he says, “Is the persistence of the Meebo experience. If you use it on the web, it’s in the same place and on every page. No matter what network your friends are on, we make them available to you, so you stay connected with the ones you want to.”

He adds, “It keeps a user connecte with the people who matter to him as he navigates interests and content around the web. We make the web social. You can go to a game, news, or product site and your friends are there so you can talk to them or share a link. It’s a very reliable experience, and that’s important.”

Green oversees the company’s product management, business development, sales, marketing and revenue operations teams. An early Meebo user, he was the first executive to join the company.

Participating in Atlanta Digital Summit

Green is among the digital media mavens slated to participate in TechMedia’s Digital Summit at the Cobb Galleria in Atlanta May 16-17. Green says you will likely hear him talk about the way “A lot of social discussion today is focused around who you know. We think a lot of the future will be in taking advantage of connections between people who don’t know each other, but who share interests.”

That’s actually already happening via sites such the Internet radio station Pandora, which shows you more music based tunes liked by people with interests similar to yours, or Netflix, which does the same thing with movies, and Amazon, which does the same thing with books.

It’s not an exact science yet, Green notes, mentioning the million dollar contest for an algorithm that better predicts user preferences (won by BellKor’s Pragmatic Chaos, which beat the Netflix algorithm by 10 percent).

Green worked with Meebo’s founders and initial team of 10 to focus the company’s strategies and objectives. It now employs 150 people and is growing from 20 percent to 30 percent a year.

A lot of the growth came from building up its sales team to pitch its rather unique advertising deal.

Web is filled with impressions no one clicks

“The web is filled with ad impressions no one clicks on,” says Green. Meebo has developed a system that not only grabs ten times more clicks than usual with a display ad, it gets about 60 seconds of engagement with the user, which is longer than most TV ads these days, Green points out.

“The user chooses to interact with that content,” he explains. “They remain in control.”

How does Meebo accomplish the higher click rate and greater engagement?

“It’s a lot of little things,” says Green. “One of them is persistence. The Meebo bar doesn’t scroll away. Lots of banner ads are bigger, but they scroll away in seconds. Ours are smaller but stay around longer, so they have a better chance of being noticed.”

Also, he says, “The way it’s designed it takes away the anxiety of interacting with normal ads. You hesitate because you have no idea where it’s going to take you. Meebo ads all work the same way. You don’t leave the site. The message comes to you.”

Go to a site that uses the Meebo system, such as TVGuide.com, look in the lower left hand bottom corner of the page and give it a spin.

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

ERollover CEO Tim Harrington: online communities need stickiness, compelling value

Thursday, March 17th, 2011
Tim Harrington

Tim Harrington

By Allan Maurer

ATLANTA – It takes a while to build a successful Web business, but eRollover, which strives to provide its users with unbiased retirement information, “Is on course now,” says CEO Tim Harrington.

Although founded two years ago by Mike Rowan and Corbett Gilliam, the site originally consisted largely of links to articles. The company brought Harrington, who has 15 years of experience with startups in Silicon Valley, on board in late 2009.

He revised eRollover’s business model.

“We’re just now launching my vision for the company,” Harrington says. It’s in a good position to do so. It raised a $1 million second round from Atlanta’s Imlay Investments in 2010. “We have an all-star management team and money in the bank,” Harrington says.

Harrington was formerly President and CEO of Fogdog Sports, an e-commerce site for sports enthusiasts, recognized by Fortune Magazine as a “world class” customer experience on the web.

He negotiated an exclusive operating and equity agreement with Nike Inc., their first e-commerce partnership. He raised more than $100 million from private and public financing, and guided Fogdog through a successful IPO with CSFB as lead banker. Following the IPO, he successfully completed a merger with GSI Commerce (Nasdaq: GSIC).

Will be at Digital Summit in Atlanta in May

Harrington is among the dozens of industry thought leaders in the digital domain who will be participating in TechMedia’s Digital Summit at the Cobb Galeria in Atlanta May 16-17.

Harrington says his vision for eRollover can bring the power of social media and user reviews and comments to the financial services space, specifically to provide non-biased retirement information to the Gen Xers who are likely to need it, because they lack the pensions and other plans that many baby boomers enjoyed. “They won’t have the same security and will need to know how to plan for the future,” says Harrington.

Unlike brokerage houses and other sources of retirement planning information, eRollover can provide unbiased information because it isn’t trying to get its users to sign up for specific retirement or money management services.

Speaking of products offered by firms focused on selling their own products, Harrington says, “Even their analytical tools are aimed at leading you down the path of investing there. There is a huge void in being able to find unbiased information, independent advisors and tools and we think we can fill that void,” Harrington notes.

The WebMD of the retirement planning space

“We want to be the WebMD of the retirement planning space. We won’t displace brokers and advisors any more than WebMD displaced doctors. It will just make consumers more educated.”

One way of doing that is to develop a community that provides peer evaluation and comparisons.  Most financial services sites are geared to keep the user on that specific site, not offer unbiased comparisons.

“Think of the power of what has happened with Facebook and Twitter and social media. Before social media, if you wanted to go to a restaurant, you might check out its website to read the menu. Now you go to Yelp and read customer reviews. If you’re going to buy a book, you go to Amazon and read reviews. People trust their peers. So we’re introducing social media into financial services right at the peak of its Gen X user base.”

We asked Harrington if he has advice for devising a social media strategy.

“You have to create a true community,” he says. “Too many people are using it as a one-off game, almost a bait and switch. In a community, users not only get something, they give something. It has to be a full 360 degree circle.”

That doesn’t preclude using hooks. ERollover does. “We put the hooks out there (such as contests) to get them interested, but also provide interesting blogs, videos, articles and tools of compelling value. Hopefully, they will share some of those. But the key thing is that you need stickiness and an overall compelling experience.”

 

TechJournal South is a TechMedia company. TechMedia presents the annual conferences:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

FindVenture.com connects entrepreneurs, small businesses and investors

Wednesday, March 16th, 2011

moneyBy 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:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

Radixx software gets airline profits off the ground

Friday, February 18th, 2011

By Allan Maurer

RadixxORLANDO, 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:

SoutheastVentureConference: www.seventure.org

Internet Summit: www.internetsummit.com

Digital East: www.digitaleast.com

Digital Summit: www.digitalsummit.com

Kabbage feeds capital to online sellers

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.

Kabbage

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

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.

Kabbage

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.”

Kabbage

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

Miami-based Merchant Advantage helps online retailers meet challenges

Monday, January 3rd, 2011

Merchant AdvantageBy 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.

Going Mobile

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.

MailVu makes video email easy, business apps on the way

Tuesday, December 7th, 2010

By Allan Maurer

Alan Fitzpatrick

Alan Fitzpatrick

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.”

Durham’s Replay Photos expanding, adding new brands

Wednesday, August 25th, 2010

By Allan Maurer

Sue Harnett

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

Carolina Panthers Bank of America Stadium

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.

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