Archive for June, 2012

27
Jun
12

Crowdfunding Innovation – @MassInno event

Mass Innovation Nights is producing two educational events about crowdfunding to help the local innovation and entrepreneur communities make sense of what’s happening.  Crowdfunding is a big movement and lawmakers are in the midst of creating guidelines and rules that will create opportunities and confusion.  MassInno is acting as a connector for our community to host a panel conversation with entrepreneurs who launched products at Mass Innovation Nights and have crowdfunded projects.  Our growing list panelists include Mass Inno alumni LifeCycle, Memory On Hand, and Ministry of Supply.

“Crowdfunding Innovation” is a sponsored, ticketed event separate from @MassInno’s free monthly Launch Parties.  The September 19th event is designed to give a current snapshot of the state of crowdfunding.  Everyone who attends will receive a 4GB MoH Band™  USB Flash Drive Wristband loaded with crowdfunding content, an e-book and digital resources.

The follow up January 23rd 2013 event will offer valuable insights on developments from the anticipated Q4 2012 passage of government rules.  Both events will take place at the Microsoft NERD (New England Research and Development) Center in Cambridge, MA.

Mass Innovation Nights is actively looking for sponsors and possibilities start with:

  • On-site event integration
  • Content marketing  as a guest blogger in the @MassInno weekly newsletter to 5,000+ readers
  • @MassInno website advertising in July, August and September
  • Consideration for panel participation
  • Content inclusion on “Crowdfunding Innovation” Memory On Hand 4GB wristbands.
  • Feature at an upcoming Mass Innovation Nights Launch Party

Tickets are on sale now http://bit.ly/CIfriend.

21
Jun
12

Crowdfunding Rewards – focus on perks, not equity – for now.

The Entretech Forum hosted an event at the Foley Hoag Emerging Enterprise Center filled with curious people looking to make sense of what this crowdfunding thing is, the JOBS Act, and current conversations about tax, equity, SEC, and other concerns.  David R. Pierson, Chair of Foley Hoag’s Venture Capital/Emerging Companies Practice Group moderated a panel that included Jack Richard, Constituent Services Counsel for US Senator Scott Brown, Jack Kelly, CEO of Adva Mobile, Jed Cohen, Co-Founder and COO of RocketHub, Joseph Schlesinger, Founder of ArcBotics, and Mike Norman, Cofounder and President of Wefunder.

The presentations painted a big picture of two forms of crowdfunding distinguished by backers’ motivation to open their wallet.  One is a group of donors driven by PASSION to contribute for the success of a project rewarded by some form of a perk.  The other is a group of donors to contribute for some form of EQUITY.

Since the equity, SEC regulations, tax conversations and many other financial factors are yet to be finalized, there is no clarity yet on the crowdfunding for equity model.

In the meantime millions are being raised through the rewards/perks for donation model.  This model offers the most to learn in the short term on how a project can launch successfully.  People are making donations in return for a range of perks at staggered levels because they believe in the idea and are satisfied with whatever item or “experience” they receive in consideration.

Jed Cohen of RocketHub.com pointed out that the arts have been early adopters of crowdfunding because of its resemblance to the arts’ familiar and historical reliance on patrons to fund works in return for access and enjoyment.  Crowdfunding rewards, simplified, are another way to pass the digital hat to get a donation and that digital hat has the potential to go viral through social media and take on a life of its own.

Going live on a crowdfunding platform starts with an accepted/declined application process.  The real hard work is in the preparation to seed believers, fans and supporters so they are ready to donate to a project online when it launches to create a fast, high-trajectory acceleration of donations to gain momentum, social media, buzz and sharing.  This acceleration creates a good environment for donor nurturing, and turns them into evangelists on Twitter, facebook, blogs and conversations.  It also builds name recognition, a cheer-for-the-home-team factor and enthusiasm that can morph into a talent recruiting tool and a base of customers to upsell or inspire product development.  Joe Schelsinger shared a customer inquiry “does this thing come in a bluetooth option?”.  His team’s concierge spirit quickly produced a bluetoothed product and it eventually became a top-seller.

Jed also offered three pillars that should be demonstrated in the application process to RocketHub to improve the likelihood of being approved:

The Project: Tell them how great the project is and how great the team is.

The Network: Demonstrate its width – how many people have you gotten excited and ready to donate when you go live? – and its depth – how connected are they?  Do you know them well enough to count on them to help your trajectory?

The Rewards: Have exciting rewards that reflect the spirit of the project, sell the story, have milestones for even bigger rewards, and make the donation/perk exchange exciting and fun.

Admittedly, I tweeted the word “buzzkill” from the event when David Pierson took his turn as the final panelist to a room lathered up with stories of six figure and million-plus crowdfunded projects and a grassroots pledges of $14 million dollars to invest.  David’s words reinforced the need for lengthy consideration of consequences on many levels after (and when) the rules and regulations are spelled out.

My takeaway from this event:  The rewards model is an exciting low-donation for a perk that’s available to all of us today.  It allows us to be part of the magical experience of seeing an idea turn into a reality and watching the trajectory hit the mark like a Boston sports team coming back and beating the arch rival.

Hexy the Hexapod – by ArcBotics

Joe Schlesinger had the best line of the night “This stuff is still being invented in your neighbor’s garage…  now you have access to it.”   

I also want to take this opportunity to put Mass Innovation Nights’ upcoming two-part “Crowdfunding Innovation” events on your radar.  Mark your calendar for Wednesday September 19th and Wednesday January 23rd at the Microsoft NERD Center.   Please follow @MassInno on Twitter, details will also be available in mid-July at www.mass.innovationnights.com

02
Jun
12

Yelp Town Hall and How One Star Increase = 5% to 9% Increase in Revenue

I attended Yelp Boston Town Hall, billed as a forum for the fourth in a series of cities hosted by Yelp offering businesses best practices in how to engage online critics and exchange ideas with other local businesses trying to harness the best in Yelp.  Yelp Boston Community Manager, Damien Smith quarterbacked a panel conversation with two avid local Yelpers, Darnell Holloway, Yelp’s Manager of Local Business Outreach, and two local businesses who are faring quite well with Yelp – Renee Eliah of Saus, a Belgian waffle and pommes frites place near Government Center and Brian Poe, chef of Poe’s Kitchen at the Rattlesnake and Beacon Hill newcomer Tip Tap Room.  And though the event was held in a restaurant with two restaurants as the businesses on the panel the folks from Yelp noted that restaurants account for only 23% of the reviews on Yelp.  Note to anyone holding a social media event in a downstairs section of a venue – make sure there’s working wifi to use an event hashtag such as #yelptownhall on social media or to check in on Yelp.  Does that belong in a Yelp review of hosting an event at the Back Bay Social Club?…

Renee shared anecdotes that Yelp worked as a marketing tool for Saus to channel pre-opening anticipation of pommes frites-philes and curiosity to build buzz when the doors finally opened.  Renee also believes that the majority of their business in the beginning was attributable to Yelp and that helped keep the business going.  Yelpers actually came to Saus’ defense from online harsh reviews of growing pains common to lots of new restaurants.

Brian talked about a real-time turnaround when a guest shared the status of a bad experience on social media while it was happening and from afar he and his team were able to figure out who the patron was and made things right for that patron before he left the restaurant.

The Yelping Yentas had earnest intentions in offering frank reviews to business but it’s hard not to feel for the business owner who spoke from the crowd equating bad reviews as graffiti on one’s home or the tattoo studio entrepreneur contending that competitors might be the source of staged reviews or inflating their own reviews manufactured by friends and family.

The event did not offer a magic elixir to remove the digital stains of bad reviews on Yelp, but it did offer some key takeaways:

  • Bad reviews are nothing new.  Attention and resolution of reasonable customer complaints can turn things around.
  • Consistently good customer service and attention will pay off in the long-term.
  • Yelp reviews can be considered focus groups for feedback on your products and services.
  • Higher ratings and great reviews grow organically.  Pushing non-Yelping customers to write a review leads to less-than-raving reviews and fewer stars because people feel obliged and may not even be familiar in how to write a great review in Yelp-ese.

    Reviews, Reputation, and Revenue: The Case of Yelp.com
    Michael Luca, HBS
    Working Paper

The most delicious part of the night was a serendipitous conversation with Chantelle Karl, Yelp Senior Public Relations Manager when I asked about how much, in dollars, a good Yelp rating is worth when Michael Luca just happened to join us.

Michael is an Assistant Professor at Harvard Business School and author of  “Reviews, Reputation, and Revenue: The Case of Yelp.com”.  Mike studied the impact of Yelp reviews on Seattle area restaurants through Washington State Department of Revenue data.  His Working Paper demonstrates that a one star Yelp rating increase can lead to a 5 to 9 percent increase in revenue.  Pretty cool to meet someone who can put it into dollars and sense.

Yelp did a good job taking their own advice listening to business owners’ side of their model for feedback.  And for those business owners who obsess over tough criticism, there are many bigger priorities in running a business and plenty of customer marketing options if Yelp is not one’s choice.




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