Lately, it seems the web has been abuzz with a new East Coast vs. West Coast battle.  However, this battle is much lamer than Notorious BIG and Tupac fighting a turf war, it’s a reputation battle between venture capitalists.  Many are claiming that NYC is on the upswing and could soon displace Boston and Silicon Valley as the premiere location for tech entrepreneurs.  Here’s an NY Times article on the subject and here’s a Chris Dixon post on what really matters for entrepreneurs choosing a location.

This digital jousting spurred an email exchange between me and a couple friends.  One of whom works for a successful middle market Investment Bank and the other works for a VC-backed Real Time Advertising Exchange startup in San Francisco.  I wrote a rather long email to them and figured that I would post it here to give my thoughts, and solicit others’, on the venture scene for tech startups in the Triangle (what we locals lovingly call the Raleigh-Durham region).

I should note that my company is not venture-backed, a fact we’re rather proud of, and I don’t mingle much in VC circles.  However, I’ve been an entrepreneur in the area for over three years, know many other entrepreneurs in the area, and actively participate in the university system and early entrepreneurship programs; so, I think I still bring an informed, yet unique, perspective to this discussion.

I have always maintained that intrinsically the Triangle’s tech-entrepreneur scene is on par with NYC, Boston, and San Fran. The universities are stellar, the weather is amazing, and there is a natural entrepreneurial spirit. However, in my opinion, there is a lack of Investment Culture. So, even though there are VCs around (albeit fewer than those other locations), it’s not ingrained in students/20-somethings here that they can drop out and raise money for a good business idea.

This cultural difference is because there haven’t been many HUGE tech exits in the Triangle to spin off young Angels and VCs, such as the PayPal Mafia out West, to actively court and mentor young entrepreneurs. I think this fact leads to fewer people even getting to the stage of thinking about starting a company, let alone actually trying to raise real money.

I’m not entrenched in the VC/investment scene here at all, but I know there are several great firms. Also, there are some good Angels. However, these resources only reveal themselves to people who are really actively pursuing them, unlike in NYC or SF where it’s second-nature to think that you can raise money with a good idea.  So, while there is available cash in the area, early stage entrepreneurs don’t know about it and don’t know to ask for it.

Finally, I think the Triangle VC scene much prefers larger, more mature, biotech-like investments. When we worked out of a business incubator in RTP, everyone there was a pharma, bio, or high tech company. I think the area’s universities spin out a lot of these type of people and the past successful exits have been in these industries, leading to a cycle of similar investments.

If Motricity or Shoeboxed or iContact or someone else had a huge exit and spun off a bunch of 25 and 30 year olds interested in Social Media and Mobile, then I think there could be a real change in the scene. However, until there are a couple of exits like that, it’s an uphill battle for tech entrepreneurs fighting mature entrepreneurs and reclusive funding.

This talk was given by Josh James at the BYU Rollins Center for Entrepreneurship.  Hat tip to that program for initially posting this video on their blog.

James is the founder of the web analytics company Omniture, which sold to Adobe for $1.8 billion, last year.  This is easily one of the best speeches I’ve ever seen a successful entrepreneur give.  James eschews any pretense and speaks honestly and openly about the thrills, rigors, and sacrifices of entrepreneurship.

Some key takeaways:

• Self-confidence.  James isn’t cocky, but there is never a question that he is fully confident in his abilities and intelligence.  In fact, when asked during the Q&A if he ever thought he would be this successful, he says absolutely.
• Evolution.  Throughout the speech, James alludes to the evolution of Omniture as a company and himself as a leader.  His first startup built simple websites at low hourly prices, however, when he saw an opening in the analytics market, he evolved the business and attacked the space.  Again, after seeing more upside on the enterprise side, he essentially shut down Omniture’s small business operations and focused exclusively on larger clients.  Then, when Google entered analytics with a free option, he evolved his pitch and continued to win big clients.  Everytime he was faced with a threat, he continued to evolve the business until its successful exit.
• Constant Studying and Learning.  James speaks at length about the volumes of books he’s read about every facet of business and entrepreneurship (he lists some must-reads).  He also cites the valuable advice he gained from mentors and other successful entrepreneurs.  It’s evident that James never stopped learning throughout his experience at Omniture, even after he was extremely successful.

I think everyone will really enjoy this.  Also, for more on James, check out his recent How I Did It in Inc. magazine, which is actually what led me to find this speech.

Every job/industry has a toolbox that is relevant to that profession.  In some professions, it’s quite literally a box of tools.  In most lives, it’s just a suite of tools that one uses nearly every day in order to get their job done well.

Within an industry, the toolboxes of each practitioner vary dramatically.  The skillset, experience, and focus of each person strongly influence which tools they lean on the most.  For example, the #1 tool in many accountants’ lives is likely a calculator.  However, others that have been in the game for awhile might rely more on mental math.

I work at a web design, marketing, and development firm, hence why my toolbox is of the digital variety.  So, that’s the broad toolbox I’m representing.  However, within the organization, my top priorities are marketing, business development, and client relations.  Furthermore, I was one of the company’s founders, meaning that I also spend a lot of time reading about entrepreneurship and helping run the actual business.  So, that greatly changes the tools I use from, say, the developers on our team.

Here are the top 5 tools I find myself most frequently using to help me do my job and run my life:

1. Gmail – It still baffles me that some people don’t use Gmail as their primary email client.  I use it for my business and personal accounts (synced to the same mailbox).

2. iPhone - I’ve been an iPhone user for a little over two years, now.  I hesitantly switched over from BlackBerry.  I was pretty intimidated by the touch keyboard and lack of email push capabilities.  However, I quickly learned that while it’s email wasn’t quite as good as BB’s, that wasn’t necessarily a bad thing.  I stopped checking my email every second and started doing some cooler things while mobile, whether it was using apps or just browsing on Safari.  Even with the bad AT&T service, I don’t anticipate switching anytime soon.  It helps me manage the business from the road when I’m traveling, catch up on reading no matter where I am, and to keep in good contact with friends.

3. 37signals Products – Our company relies heavily on 37Signals suite of collaboration tools. Campfire serves as our company chat room, which we all interact in throughout the day.  Basecamp is our project management system that allows our small team of 8 people launch more than 100 websites each year.  Highrise is a CRM tool that I use on the marketing side, helping me keep track of leads and prospects.  Without these tools, we wouldn’t be able to be nearly as productive and organized.

4. Evernote – I tend to use this tool more in my personal life than work, but it still comes in handy at the office, too.  Evernote is a kind of digital memory system.  You can insert any type of media – articles, videos, audio, images – and it’s all categorized and searchable.  I really just use it for articles.  I love reading different magazines, newspapers, and blogs, and when I come across a good article that I know I’ll want to reference in the future (whether for work or for fun), I’ll put it into my Evernote.  There are tons of good usecases for the program, from saving business cards to wine labels.  I recommend you check it out — also, it’s free!

5. Pandora/Grooveshark/Hypem/iTunes – As you can tell, this one is kind of a blanket item for music.  I can’t work, write, or think in silence.  I always need some sort of background noise, and my preference is music.  Switching between these four allow me to get different music for my mood and also just new selections.  I think everyone is familiar with Pandora and iTunes.  However, if you’re not familiar with Grooveshark or Hypem, I strongly recommend you check them out.  Grooveshark lets you stream any artist, song, or album for free.  Just type it in there and click play.  Hypem is an awesome aggregator and voting system of music blogs.  It posts songs from thousands of blogs and then lets listeners “favorite” them, allowing you to build your own playlist of favorites and also aggregating a list of the most popular songs on the site.  Grooveshark has helped me find many new artists and songs (especially remixes!).

Well, that’s my digital toolbox.  These tools help me get through everyday in a productive and sane manner.  What would you put in your toolbox, if you really had to think about it?

Every job/industry has a toolbox that is relevant to that profession.  In some professions, it’s quite literally a box of tools.  In most lives, it’s just a suite of tools that one uses nearlyevery day in order to get their job done well.

Within an industry, the toolboxes of each practitioner vary dramatically.  The skillset, experience, and focus of each person strongly influence which tools they lean on the most.  For example, the #1 tool in many accountants’ lives is likely a calculator.  However, others that have been in the game for awhile might rely more on mental math.

I work at a web design, marketing, and development firm, hence why my toolbox is of the digital variety.  So, that’s the broad toolbox I’m representing.  However, within the organization, my top priorities are marketing, business development, and client relations.  Furthermore, I was one of the company’s founders, meaning that I also spend a lot of time reading about entrepreneurship and helping run the actual business.  So, that greatly changes the tools I use from, say, the developers on our team.

Here are the top 5 tools I find myself most frequently using to help me do my job and run my life:

1. Gmail – It still baffles me that some people don’t use Gmail as their primary email client.  I use it for my business and personal accounts (synced to the same mailbox).

2. iPhone - I’ve been an iPhone user for a little over two years, now.  I hesitantly switched over from BlackBerry.  I was pretty intimidated by the touch keyboard and lack of email push capabilities.  However, I quickly learned that while it’s email wasn’t quite as good as BB’s, that wasn’t necessarily a bad thing.  I stopped checking my email every second and started doing some cooler things while mobile, whether it was using apps or just browsing on Safari.  Even with the bad AT&T service, I don’t anticipate switching anytime soon.  It helps me manage the business from the road when I’m traveling, catch up on reading no matter where I am, and to keep in good contact with friends.

3. 37signals Products – Our company relies heavily on 37Signals suite of collaboration tools.  Campfire serves as our company chat room, which we all interact in throughout the day.  Basecamp is our project management system that allows our small team of 8 people launch more than 100 websites each year.  Highrise is a CRM tool that I use on the marketing side, helping me keep track of leads and prospects.  Without these tools, we wouldn’t be able to be nearly as productive and organized.

4. Evernote – I tend to use this tool more in my personal life than work, but it still comes in handy at the office, too.  Evernote is a kind of digital memory system.  You can insert any type of media – articles, videos, audio, images – and it’s all categorized and searchable.  I really just use it for articles.  I love reading different magazines, newspapers, and blogs, and when I come across a good article that I know I’ll want to reference in the future (whether for work or for fun), I’ll put it into my Evernote.  There are tons of good usecases for the program, from saving business cards to wine labels.  I recommend you check it out — also, it’s free!

5. Pandora/Grooveshark/Hypem/iTunes – As you can tell, this one is kind of a blanket item for music.  I can’t work, write, or think in silence.  I always need some sort of background noise, and my preference is music.  Switching between these four allow me to get different music for my mood and also just new selections.  I think everyone is familiar with Pandora and iTunes.  However, if you’re not familiar with Grooveshark or Hypem, I strongly recommend you check them out.  Grooveshark lets you stream any artist, song, or album for free.  Just type it in there and click play.  Hypem is an awesome aggregator and voting system of music blogs.  It posts songs from thousands of blogs and then lets listeners “favorite” them, allowing you to build your own playlist of favorites and also aggregating a list of the most popular songs on the site.  Grooveshark has helped me find many new artists and songs (especially remixes!).

Well, that’s my digital toolbox.  These tools help me get through everyday in a productive and sane manner.  What would you put in your toolbox, if you really had to think about it?

It has been awhile since I last posted and I hate for the first post of the new year to be short and self-serving, but I wanted to quickly point out an article that features my company, New Media Campaigns, and quotes from me.  The article appeared a couple weeks ago in Nebraska’s Lincoln Journal Star and is about local candidates embracing online campaigning and social media.

The article used my perspective in comparison with the actions and thoughts of actual candidates.  The gist of what I told the reporter,  JoAnne Young, is that essentially every campaign now understands that they need to use social networks, but the real difference is how they are using them.  The line isn’t whether or not your Tweeting or on Facebook, it’s whether or not you’re using those tools to engage, energize, and educate voters.

It was an honor to be used as an “expert” in the article.  I spend a lot of time thinking and writing about these issues, so I was more than happy to speak with JoAnne.  Perhaps the coolest thing about getting featured is the fact that NMC doesn’t employ a PR Agency and we didn’t contact the Star.  They found us through content we’d created on our blog, called us up for our perspective, and then featured us.

It was nice to know that we didn’t need to pay a big agency to get some exposure and that the reporter was really scouring the Web for the best content out there.  Todd Defren actually supported this theory today by sharing the GWU social media and journalism study that 89% of journalists now turn to blogs for research for stories!  Just reinforces the idea of inbound marketing and creating quality content — both to get found by leads and by influencers, such as media.

Anyway, hope you enjoy the article and thanks again to the Lincoln Journal and JoAnne Young for shedding light on such an interesting topic and for featuring NMC!

Inc. had a great profile on Jason Fried yesterday in their The Way I Work section.  For those of you who don’t know, Fried is the founder of web company 37signals.  The company is best known for their suite of easy-to-use project management and collaboration tools, as well as for their popular blog that has over 100,000 subscribers.

I encourage you to check out the piece and read it for yourself.  It’s a great read on a very successful entrepreneur and someone that I’ve looked up to since we first started our web design firm in 2006.  I’ve jotted down a few takeaways and thoughts.

1. Continue to evolve your business and look for new revenue streams.  37signals started as a web design firm in the services industry.  They were beholden to deadlines and client approvals in order to get paid.  They worked on their first products as in-house tools to be used for them, but then quickly recognized the revenue potential of these side projects.  They started marketing their products to their customers and soon their product business overtook their services to the point where they no longer had to meet another client deadline.  Many companies would build a tool in-house and not think to market it — 37signals continued looking for that next source of revenue and it totally changed their business model and lives.  This is actually exactly what my company is doing with our new CMS for Designers, HiFi.

2. Don’t be afraid to give away content and “secrets” for free.  37signals has kept a detailed blog for years.  Covering everything from their products to business strategy to actual revenue numbers.  Some marketers may think its crazy to be so candid and give away the “secrets” of their business.  However, it’s that very candor that has allowed 37signals to touch so many people.  Due to their unfettered openness and quality content, the blog has close to 100,000 subscribers, most of whom are very excited to buy the next product the company pumps.    Fried puts it best when he says you have to “out teach, out share, and out contribute,” just as celebrity chefs do.  Share your “secrets”, but reap great rewards in the long run as you engage your target and spread your brand.

3. It doesn’t hurt to have a little attitude.  No one has ever accused Fried of being shy or keeping his opinions to himself.  However, it’s frequently this controversial attitude that cause people to read his every word.  No one wants boring.  The web loves some controversy.  Fried’s certainly isn’t the only person in the world that values profit vs. user growth, simplicity in application design, and short work weeks.  However, he definitely shouts these tenets louder than most other people.  Whether he’s Tweeting, blogging, or speaking, he’s always on message.  In the profile, he even notes that many of his Twitter followers are just their waiting to argue with him or say something hurtful.  However, I’m sure that doesn’t bother him too much as he licks his wounds all the way to the bank.

I really encourage you to check out the article and learn from one of the web community’s best and brightest.  Be sure to leave any other thoughts in the comments.

Mint.com recently had a successful exit to Intuit for $170 million.  While some, such as Jason Fried, have argued over whether the exit was a good decision or a premature one, I don’t think we can pass judgment without knowing a significant amount of confidential details (i.e., profitability, user growth, revenue growth, VC pressure, etc.).

So, this post is operating under the (perhaps naïve) assumption that any exit where the founders make a ton of money and keep their product intact is a successful one.

In just a few short years, Mint grew from just an idea in Aaron Patzer’s head to a product being used by 850,000 people.  This dramatic growth and subsequent acquisition didn’t just happen by luck, and there are several lessons to be gleaned from the success of Mint:

1.  Don’t be scared to challenge an established player. Mint launched as a boot strapped venture by Aaron Patzer.  He saw an opportunity in that all other personal financial software was cumbersome and not necessarily targeted at younger users.  Rather than just complain to friends and be afraid to challenge multi-billion dollar competitors like Intuit and Microsoft, he sacked it up and decided he could do it better than them.  We always hear of the fabled garage startup putting an established player out of business, but most entrepreneurs still remain frightened of challenging these big companies.  Mint proved you with the right idea, you can out swagger even the most mighty of competition.

2. Elegance in an app matters. One of the first comments made about Mint by new users is almost always the beauty and intuitiveness of the app.  The company understood that their product, no matter how many cool features were packed in, would be rather useless to customers if it wasn’t extremely usable.  They when went the extra mile and added a shine of elegance on top of the intuitiveness.  In addition to this strategy making the app fun to use, it also helped capture college-aged users (a prized demographic) who are used to working on the web and appreciate extra attention to detail in their software (see: Apple).

3. Think of ways to break the “usual” business model. Mint is a free service.  So, it must be supported with revenue from banner/text ads, right?  I mean, that’s the way free things work: Google, Facebook, Myspace, NYTimes.com, etc.  Is there another option?  Mint didn’t fall into the trap of just mindlessly following its predecessors (albeit very, very successful predecessors), but came up with a model unique to its offering.  Mint made its money by analyzing a user’s financial situation and habits, and then recommending relevant products or offers.  This is different than a freemium model (see Evernote or DropBox) and the typical advertising relationship, but that didn’t prevent Mint from giving it a shot and ultimately succeeding with it.

4. Free can work. While my company certainly believes in charging for our products and services, I fully understand that many start-ups haven’t been charging lately.  While I, like many others, have an issue with this general approach, I can’t deny that it can work in certain situations.  If your product or service can gain users at a such an accelerated rate that you can make money because of them rather than from them, then go for it.  However, don’t hold on for too long, thinking that the big jump in users is just around the corner while you spend all of your cash.  It’s better to start charging early than too late.

5. It’s ok to exit. I think I’ve made it clear in this article that I think it’s more than ok to make an exit, if the terms make sense.  Much of an exit decision goes far beyond just compensation and places a lot of emphasis on other aspects of the deal, such as product future, ongoing commitment to purchaser, and more.  Mint was able to keep its product and free subscription model in place, while also doubling its user-base with Quickbooks’ 1.4 million users moving over to Mint.  I’m sure CEO Aaron Patzer would not have exited without assurances that the product and business he built would remain intact and that he was also excited about the idea of growing his product in such a large way.

6. Take your time.  Mint was launched in 2006 and took several rounds of funding.  It was originally bootstrapped by Patzer and he hired slowly before getting his first round of funding.  Not every successful exit is some blowup success over night.  These things take time and taking time is the way to build the best company possible.  I remember when we first launched NMC, we thought we’d have an easy exit that would make us filthy rich within the first five months of the company – while we did have an opportunity to sell that quickly, it wasn’t the right deal and by understanding the importance of taking our time and not rushing, we’ve been able to build a much more valuable and enjoyable company.

7. Word of mouth can get it done.  Mint outgrew its large, public competitor at such a staggering pace that it would seem that they were investing all of their money in marketing.  However, the company had a rather miniscule marketing budget, spending only around $50,000 on search engine ads.  Everything else was done through inbound marketing, word of mouth, and hard work.  The company kept an updated and very helpful blog (this very cool graphic is actually how I first found the company: Visualizing Uncle Sam’s Debt), attracted fans on Facebook, and provided useful information on Twitter.  I know I helped in this effort, as after I started using Mint, I instantly added it to my Facebook favorite links and emailed it out to about two dozen of my friends.

As you can probably tell from this post, I think presents a pretty inspirational story as a startup and marketing machine.  However, unlike people like Fried, I don’t think their acquisition means that the story has ended, but that its simply entering a new chapter.

Are there other lessons to be learned from Mint?  What other startups are putting these lessons to use?  Have you?

It has been a few weeks since I put a post up (we have been super busy at New Media Campaigns), but that hasn’t slowed the new blog from moving up in the world.  I present you with three examples:

1. New Blog Design and WordPress Install.  One of the main goals of starting this blog was to help me get more comfortable with CSS, HTML, PHP, Apache, and websites in general.  Even though I run a web design firm, I’m just the guy that selling and happifying; I totally rely on the other guys to actually implement an elegant solution to clients’ problems.  So, with some help from my colleague, Kris Jordan, I was able to install WordPress onto our company server and redesign the blog with the Fusion WordPress Theme.  I also made some additional tweaks through CSS and plugins, getting the blog to the current state it is in.I’m happy with the way it looks, but there are definitely more improvements to come, so stay tuned!
2. Ranking #1 in Google for my Name.  Another one of the main goals for the blog was to take control of my digital footprint and be the top organic search result for Clay Schossow (which gets millions and millions of searches everday, obviously).  Thanks to a little link love from my business partner, Zach Clayton, a targeted domain, and several posts, I now organically rank #1 for my name.  According to Google Analytics, this status has already helped a few curious people learn more about me.  I’d much rather this blog be the top Google result than Twitter, LinkedIn, and Facebook, which used to be the top three results, as the blog is a more rounded and thoughtful representation of me…or at least, I like to think so.
3. Being named one of the 100 Best Blogs for Young Entrepreneurs.  I got an email from Kelly of the “Online College Degree Blog” about it over the weekend and was at first pretty skeptical.  However, after checking out the post, their site, and some compete data, I realized it wasn’t a scam and was flattered to be chosen.  Seems like it’s a pretty new site aimed at acting as a portal for people interested in online education, especially younger people.  They feature 99 other great resources on the list and gave this blog a nice write-up…even if they did add an “L” to the blog’s name, which hopefully they fix soon.  Not sure where or how they came across the blog, but thanks for the shout out.

Well, that’s the blog update.  I’ll put a more substantive and less self-glorifying post up over the weekend.  Thanks for everyone’s support and interest, it definitely spurs me to make more of an effort to post good content here.  If you like what you’ve seen so far, be sure to subscribe to keep up to date.  Thanks!

By now, we’re all very familiar with the accepted reasons for the necessity of an auto bailout: expensive union contracts, executive opulence, and poor management. However, I think there is one more to add to the list: a total branding and marketing failure.

I mean, had the companies just sold more cars, they could have avoided the mess that they’re in. While GM and Ford were struggling and giving up market share, Toyota’s numbers continued to grow.

I think there are a few fundamental branding issues that contributed to the overall decline of our domestic automakers.

1. Wrong message.  For the past decade, the US automakers have been obsessed with pushing and selling bigger while foreigners have been selling smarter. Whether it was SUVs or Trucks, the overall theme of the big three’s campaigns have been the domineering nature of their vehicles rather than their practicality. For years, you’ve seen Toyota selling vehicles based on great mileage and excellent ratings, while Ford, GM, and Chrysler failed to ever zero in on these benefits.
2. Stagnant brands.  Has your perception of Ford changed over the past decade? I know mine hasn’t. To me, it represents a company that makes pretty cheap and unreliable smaller cars, but has some great SUVs and trucks. As the market has been shifting toward cars over trucks, Ford needed to change this perception, but it did nothing to do that. It could have been as drastic as a new logo (like Pepsi) or a simple, consistent new message in their ads. Overall, Ford’s lack of commitment to changing the connotations associated with their brand hurt their sales numbers.
3. Number of Brands.  How many brands are encompassed by GM? Four? Five? Six? Try eight. That’s right, one company trying to successfully sell eight unique brands. How can GM create a unified, smart message when they’re trying to market brands as different as Saturn and Hummer? In a viability plan submitted to the government, GM recently announced that they would halve their brand count to four. However, that is still one more than its top foreign competitors, Toyota and Honda. Ford also is shedding its excess foreign brands to try and focus on just three core brands. Ford and GM having to market so many unique brands causes each brand to suffer, as they have to fight for resources and attention from the parent company. It’s just simply too hard and inefficient to successfully market more than a half dozen distinct brands; Toyota and Honda understood this fact long ago, but the domestics just kept growing their repository of different logos.

 

While many things contributed to the failure of the auto industry, I think more attention has to be given to the above points and the total mismanagement of their brands and marketing. The domestic automakers typify the type of companies that deserve to die in a recession: bloated, stagnant, and blind. Unless they make some real changes in their branding and marketing, the bailout will only delay the inevitable. Are there other marketing and branding follies by these companies that have caught your eye?