Friday, February 27, 2004

MIT Enterprise Forum

Tuesday night I had the pleasure of attending the Annual Retro/Future-Spective 2004 Kickoff Event. How to attract investors; a topic of keen interest to entrepreneurs and those of us who have the pleasure of telling their stories. The evening began with success stories from past MIT Enterprise Forum presenters, followed by a panel discussion about what makes or breaks deals. Capping the evening was Scott Lundstrom's perspectives for the coming year. Here are some of the highlights:

Chris Westphal of Visual Analytics emphasized the importance of financing your business in a way that does not detract from your core business. Visual Analytics was bootstrapped, financed from sales, because it made sense for its business.

Bob Storey of Vapotherm explained how they managed their costs like an auto supplier rather than a manufacturer of medical devices. Everything not immediately connected to its core business was outsourced. Vapotherm was careful to choose suppliers who understood and believed in its business. Storey spoke about the importance of knowing where your demand is and not always going after the high profile customer. Community hospitals used and understood the product, so Vapotherm used their case studies, which were picked up by medical journals. It was unnecessary to pay any research companies.

The panel discussion was moderated by William Winslow with Charles Curran, Mike Clarke, and Joe Walsh as panelists.

Winslow compared the current investing climate to those scenes in the old Star Trek series where Kirk would say what is it, is it alive? and Spock would answer it's life, but not life as we know it.

Here are some of the observations from the panelists:

Venture capitalists like to spend as much time as they can on due diligence without losing the deal to rivals. It is important for the entrepreneur to take control of the process, set a deadline and enforce it.

Investors are looking for a company that can succeed as a stand alone company, an initial public offering or at least merger & acquisition.

It is important to explain why anyone would require your product or service.

Entrepreneurs should not overlook debt financing. Networking with groups like the MIT Enterprise Forum is the best way to learn about banks who understand startup companies. Permanent-working-capital-term-loans or lines-of-credit backed by receivables and inventory are the most common forms of debt financing.

Don't overlook government programs, not only the well known Small Business Administration's loan programs, but also state programs such as the Virginia Small Business Financing Authority.

The most important element is the level of personal commitment on the part of the entrepreneur as there are usually no other assets. Bankers are different from venture capitalists, as they have no interests in running the company.

Scott Lundstrom's Perspectives for the Coming Year

The economy is coming out of a period of investment capital, where wealth flows to investors and top management, to a period of productive capital, where wealth flows to the customer. The low cost producers will gain market share at the expense of the price leaders.

Buyers are no longer interested in buying systems, paying maintenance fees and replacing the whole system in three to five years. Now they want to outsource the whole thing. In a period of productive capital, technology companies can look forward to single digit growth and will have to struggle for that.

The IT department no longer owns the budget; new projects are only undertaken if they solve a business problem, production problem or supply chain problem.

The middle size companies want ease of installation, ease of integration and ease of use. They refuse to pay a fortune for software and then hire an army to run it.

Open source already dominates certain markets, including web and application servers. It is clearly the wave of the future. In India and elsewhere the engineering schools are all teaching open source and the next generation of programmers will be proficient in open source.

Lundstrom ended on a semi-optimistic note suggesting that technologies such as Radio Frequency Identification (RFID) or software systems that enable compliance with regulatory requirements such as Sarbanes-Oxley have a bright future.

Tuesday, February 24, 2004

Llyod Trufelman and Laura Goldberg have a great introduction to blogs in Public Relations Tactics. Just right for those vaguely familiar with blogs. From their article:

The most important thing a publicist can do before pitching a blogger is to carefully read his or her blog. Unlike beat reporters at typical news outlets, bloggers are extremely idiosyncratic in choice of subject matter and slant. In order to begin a conversation with one - and it should be viewed as a conversation, rather than a pitch - it is vital that you are well-acquainted with the interests of the blogger. Many of them still consider their sites to be personal forums for their views and perspectives, and are wary of corporate or PR interference.

In fact, many bloggers have no experience at being pitched by publicists. Recently, we conducted outreach to several blogs on behalf of our client Business 2.0 magazine, which had published an article about the Web log phenomenon ( What was striking throughout the pitching process was the discovery that most bloggers were rarely, if ever, approached by PR professionals. The campaign drove traffic to the story, but it also created a flood of commentary on several blogs - questioning how, or even if, PR pros should get into the mix. Prominent bloggers that joined in the fray included Paul Boutin and Jason Kottke.

Their point about reading the blog first cannot be made too strongly. Reporters are used to receiving press releases and take it as part of their job. Bloggers are not interested in sorting through a vast collection of press releases on the chance of finding something interesting.

However I have to disagree with their strategy for selecting blogs to pitch to:

Another boon for PR pros is that bloggers tend to read other blogs and comment on them. It is not surprising to see a single hit on one key blog turn into mentions on several others. For this reason, it is best to begin your campaign by contacting the most popular, targeted blogs. Most blogs feature sidebars highlighting URLs of other like-minded blogs. Any site that is mentioned several times by other blogs, and that is included in a majority of recommended blog lists, should be noted as a primary target.

The problem with this approach is that everyone else has the same idea. Better to notice which blogs are followed by the most popular bloggers, that is, which blogs do Dan Gillmor, Ed Cone, et al link to? Get your client's story on those blogs and it is likely to be picked up by the larger blogs and ultimately the mainstream press. I think it makes sense to start at the bottom of the media-food-chain, rather than the top.

Sunday, February 22, 2004

What is the purpose of technology public relations? Surely to communicate a company's message to its customers, prospective customers, employees, suppliers, industry peers and the general public. That may seem obvious, but judging from the copy used in brochures, press releases, and PowerPoint presentations, too many forget to consider that when writing copy.

Why the passion for acronyms? When was the last time you sat through a PowerPoint presentation without seeing an acronym? When was the last time you sat through a PowerPoint presentation without seeing an acronym you had never seen before? Even if they are familiar terms, would it kill anyone to write out Return on Investment? Web Services? Customer Relationship Management (as opposed to Certified Records Manager)? If we could bring ourselves to spell words out our presentations, press releases, and marketing materials would be far clearer to our prospective customers. Wasn't that the point?
Alice Marshall
February 21, 2004