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Revenue Bootcamp 2009

On a whim, a twitter whim, I decided to head up to San Jose last Friday for Revenue Boot Camp. The day was prepared by Guy Kawasaki and the folks at Garage. Arrived the day before, hung out with some friends in San Francisco, got to bed at a reasonable hour and prepared for a great day.

First panel – teenagers won’t pay for anything
The first panel consisted of 4 teenagers and a blogger/editor/writer who studies the behavior of the under 20 crowd. These are the kids that have grown up in the Napster age of media, and the likelihood of them paying for anything on the internet is not something I would bet on. The young adults on stage were very engaging, as savvy as you’d expect most kids their age (geekdom not represented). It spoke volumes about how the mindset of folks delivering content and services online needs to change for the up and coming consumers. Quite an interesting survey of the folks on stage revealed that GMail is the huge win with their crowd, with Facebook and Twitter very distant runner-ups. Take away: if the service is unique and vital to their communication, they may shell out some dough, examples: Google App suite and a pittance for Facebook.

And the ground swells 140 characters at a time
After sobering up with the previous panel of younger panelists, Charlene Li moderated a lively discussion about directing a traffic flow to your site. Information packed is the best way to describe the hour-long panel. The two folks that I gained the most from were Dion Lim and Neil Patel, the former for his experience in getting to success with Simply Hired, and the latter for his blunt manner on real world issues.

The learnings here were centered around SEO and SEM, focusing your attention on the best strategy. Google Analytics, or any analytics package that you are using, should be studied and understood, this is your userbase. But beyond the search engines, the focus should be on engaging with your customers wherever they are … partnering with adjacent businesses, blogging, meetups, personal communications, and being “the face” of your organization.

If it’s free it’s me!

Chris Anderson has been in the news online for at least the last week, being blasted by several folks for a seemingly uneven pricing to his book “Free: The Future of a Radical Price”. The keynote delivery was very enlightening, and while sobering to content providers who would like to hold on to the “old way” of doing things, it would do them well to listen, and re-think their business model for the digital age.

The majority of his talk centered around the 21st century business model dubbed “Freemium”. The whole idea is that you would price some facet of your generic service at zero, and charge for premium services. Content providers and application services companies would be able to more than make up for the “free” folks by charging their niche customers. Takeaways: people will pay to: save time, lower risk, things they love, achieve status, if you make them. The last in that list, means you better have a really unique service nobody else provides.

Advertising is dead. Long live the popup
If you could pick the 5 most influential and relevant producers and consumers of the advertising model, it would be those in this panel. Represented here: Glam Media, Federated Media, Microsoft, Facebook, and Yahoo!. Notice only one thing about the folks on this panel, and you’ll have gotten a big part of the panel … they’re giants. Advertising as a revenue stream for a startup, with little capital, probably not going to pay for the morning latte. All is not lost though, the key here is to place yourself as close to the bottom of “the funnel” as you can, and offer niche content not available everywhere. If what you’re providing, is of a high value to a larger fish, you can look at partnership with those individuals, sponsorships exist as well to help. In short, advertising while it should be something you consider, the realization here should be that slapping adsense on your pages probably isn’t going to pay for a G5.

Add wrapping paper to your digital gift? $10 please!
If you saw no other panel that day, this was the one to attend. The panelists included IMVU, TripIt, Photobucket.com, Commission Junction, and the controversial ShoeMoney Media Group founder, Jeremy Schoemaker. The business models in short:

• IMVU gives away their software and revenue comes from digital goods (avatar pimping)
• TripIt is in the early stages but gives away most of it for free, just started a premium service which fills a “niche”
• Photobucket.com gained a large following by requiring webmasters to link back to photobucket in order to display an image from their free service, and makes money on printing and other services related to the image. They also have a premium niche service
• Commission Junction and ShoeMoney Media Group make a lot of money with affiliate marketing and hooking publishers up with people who need them.

Will Harvey from IMVU talked a whole lot about testing, and how much they failed in the beginning before they found out how to get people “in the door”. One of the best, was the wrapping paper story where they basically kept releasing more expensive “digital wrapping paper” until they found the price arc that folks would be willing to pay … which ended up not subsiding until it reached $10 USD. And several folks have done adwords testing for an idea where they didn’t know if it would be a good one, so started an adword campaign for the idea, and gathered analytics on the visitors. There was of course, nothing there to get, but it let them test their hunches before spending a lot of time on something that wouldn’t have traction anyway. Most of the folks online echoed the advice from Chris Anderson about offering up a lot for free, and charging only for the niche stuff, exclusive group. And to further back up “Freemium” being alive and well as a business model, along with the folks on stage singing its praises, one of the founders of Evernote commented during the talk about how well they’ve been doing with their freemium model.

Mozart was dead at 35
If you’re looking for an advisor / early round investor, or a huge team with resources to help you achieve your plans of world domination, you’re probably looking at an Angel for the former, and a VC in the latter. Sequoia is definitely one of the giants, a venture capitalist that has funded the likes of Apple, Oracle, and Cisco just to name a few. In other words, this giant in the VC world, creates other giants. Paul Graham is probably best known for his essays that you either love or despise, and for starting an angel investment firm called Y Combinator. Guy Kawasaki moderated the discussion and has also funded quite a few startups that we use on a daily basis (Pandora anyone?).

The question on everyone’s mind, and from our fearless moderator was, who do you look for, and how do we get noticed? The answers throughout the hour-long, information packed session: show passion but don’t talk about it, youth is attractive for a VC / Angel, investments in the far east and Israel is big for Sequoia right now, and negotiate the ownership percentage (more than 35% and you suck). It was great to hear first hand accounts of working with founders, emails/phones about “having to talk” are never, ever, ever good news… good news is usually a group event. And above all else, the theme seemed to be, make something that you want, and other people are bound to want it as well.

Conclusion
I gathered early on, that this was the first Revenue Bootcamp that Garage has organized, and I was definitely impressed and left with a lot of great useful information. A big thanks to Guy Kawasaki and team for putting together the event, all the panelists, and the entrepreneurs that I met that day.