Startups can no longer count on traditional PR — here’s why


This is a guest post by Vanessa Camones, founder and CEO of theMix agency. 

The tech boom is transforming every business it touches, but it doesn’t seem to be helping a core part of the industry: Public relations for tech companies. By and large, PR hasn’t adjusted to the rapid shifts of the digital era, and as their top clients in tech succeed (or at least enjoy the bubble), they themselves strain to stay relevant. Worse, this is hurting the thousands of startups desperate to get traction for their product and brand amid a market oversaturated with competition. The problem is so dramatic, top venture firms have even tried to replace traditional PR with their own PR platforms. In my view, however, that’s only a temporary bandage on top a much deeper wound: When it comes to tech in particular, traditional PR is fundamentally broken, beyond repair, and losing its relevance in real time. The sooner struggling startups realize this, the better.

Here’s some symptoms to the problem as I see it:

Yes Men PR Firms Not Adjusting to Social Media

Over the last few decades, traditional PR agencies have developed a Voice of God/humble servant relationship with their clients, treating their words and opinions as sacred, rarely to be challenged. But in the social media context, where a company announcement can be undermined in a matter of hours, this is self-destructive for both sides. Consider what Twitter did recently, announcing changes to their blocking policy, only to encounter instant, pervasive user backlash, to the point where the company quickly reversed itself. You see this pattern time and time again in tech — a feature goes out, there’s a PR nightmare, and the company backtracks. Clearly their PR firms aren’t warning them about these impending disasters, or briefing them on common communication mistakes — or the companies themselves aren’t listening to their counsel in the first place. And while established players like Twitter can weather social media-fueled user revolts, they can be disastrous for smaller startups.

Take OUYA: The indie videogame console started with a hugely successful Kickstarter and a dedicated fan base eager to become its evangelists. But after release delays and poor communications with its most passionate backers and developers, the brand largely became poisoned on influential social sites like Reddit. I admire OUYA founder Julie Uhrman and hope her product can recover its luster, but am also pained at all the squandered opportunities lost by the speed of social media.

In any case, most startups tend to work with PR only for press releases and product launches — which takes me to my next two points:

Tech Press Releases Generally Don’t Drive Conversions

Many startup CEOs assume that announcing their new service or app with a press release is key to their launch, but as I must often explain to them, press releases per se rarely drive actual user conversions. That’s true even if the release is picked up and featured in a post by a top tech news site: While several million readers may skim the post about your app, only a fraction will bother clicking the actual App Store link, and only a fraction of them will install the app, let alone use it more than once. This problem is compounded by the sheer excess of tech press releases put out on the wires every day, choked over with generic product descriptions and executive quotes which sound like no human ever, and blatant SEO keyword scheming — the latter, in part, causing Google to change its policy on press releases altogether, making them even less relevant.

To be sure, press releases serve a purpose as a legal/investment formality, but that’s very different from actually trying to tell a narrative. If you have a good product, you should be telling its story through a video, a blog post, and an ongoing conversation in your social media channels. But “ongoing conversation” isn’t typically part of a PR firm’s DNA, or what startups expect of them.

Startups and Their PR firms Don’t (Generally) Value Social Media and Content Strategy

As we saw with the rise of blogs and now the growth of “linkbait” posts, content that’s emotionally engaging and immersive is what works in today’s ecosystem: Stories that people can understand in a simple, straightforward context. The same is generally true for content around products and companies, but that’s the most difficult kind of writing to do well. It’s best expressed not in press releases, but via blog posts, online video, and social network updates. However, most PR companies weren’t prepared for the shift that social media caused, and have been slow to integrate it into their core capabilities. So they also don’t understand how to manage and create conversations — an absolute necessity for real-time marketing — while companies big and small don’t understand how to fit social media as a layer into their existing content strategy. (According to an Altimeter Group report, only 1 in 4 companies approach social media holistically; according to Context Marketing research, 49% of B2B marketers still don’t even have a content strategy.) Consequently, tech PR is placed in a single silo, and any coverage earned for their clients is relegated to a single press bump without a broader context.

All this is probably a major reason why recent attempts to revamp startup-based PR don’t seem to be returning significant results. HackPR was supposed to transform traditional PR, but we haven’t heard much about it since its launch last year. (Ironically making it a likely case study in one-hit wonder coverage — itself a typical PR problem for startups!) The same might be said about AirPR, which first launched as as “Match.com for PR”, but now seems to be pivoting to become an analytics-for-PR service.

The good news is that traditional PR firms are starting to change, and integrate content strategy into their services. Top agency Edelman just added a content arm, as did Weber Shandwick. Both represent some of the world’s biggest brands, and it’ll be interesting to see how their strategy adjusts to include content. At the same time, powerful social sharing platforms like Pluck, Percolate, and Socialeddy can help PR/marketing teams manage their channels, while also giving them the data to measure success, so they can build a case internally for continuing to support an entire integrated comms strategy.

Small startups, however, may not see these shifts soon enough to benefit from them.  But based on past experience, I’m confident the best ones are agile enough to thrive in the tech industry’s post-PR agency future.

Vanessa Camones is the founder and CEO of theMix agency, a full-service marketing and communications boutique.

 


VentureBeat » Entrepreneur
Vanessa Camones

With $100M+ Run Rate, Gett Reveals A New Look, App And Delivery Service As It Prepares To Do Battle With Uber

Screen Shot 2013-12-25 at 2.26.16 PM

When it comes to the emergent world of on-demand transportation, Lyft and Uber have been capturing the lion’s share of headlines of late, seemingly deadlocked in a race to become the clear “market leader” in a hot space that’s rife with competition. Of course, with startups like Hailo and SideCar and riding the same rising tide, there are more than a few startups looking to throw their name in the hat.

However, another European on-demand car service is finding investors more than willing to bet on its own fast-growing business, as it, too, follows Hailo into the U.S. market. Already operating in over 20 cities across the U.K., Russia and Israel, GetTaxi opened its doors for the first time in the U.S. in August, looking to take on Uber and others by providing New York City passengers with a low-cost black car alternative (or “G-Cars”).

As part of its expansion into the U.S., and in effort to differentiate itself from the pack, GetTaxi has taken on a new look since August. For starters, it’s rebranded its U.S. branch and is now operating under the brand Gett at Gett.com. Secondly, although NYC has cleared the way for “e-hail” taxi services after fighting them tooth-and-nail, Gett has decided to drop its taxi service in NYC.

According to co-founder and CEO Jing Wang Herman, it became apparent that, in spite of the efforts of services like Hailo, yellow cab-like on-demand services in New York City just don’t make sense. At least not yet. The proliferation of yellow cabs in the Big Apple has meant that too many drivers found that passengers weren’t showing up because they were able to find a ride on the street first.

So, after dropping their cab service in NYC, Gett has decided to take on Uber and many others operating “black car” businesses by focusing on offering pricing that’s both predictable and affordable. The company is trying to offer a payment structure, Herman says, which makes sense for both drivers and passengers, while establishing Gett as a more affordable option when compared to some of its better established competitors.

In addition, Gett offers flat fares between neighborhoods regardless of time spent in the car or distance traveled, and avoids the lure of surge pricing, a model oft-employed by Uber. The company also launched a “future booking feature,” which allows riders to not only order a black car on-demand for immediate pick-up, but schedule a future ride as well — up to two weeks ahead of time.

Furthermore, Gett is not only finding success catering to corporate clients (with 1,500 corporate clients in 20 cities, including Google and Morgan Stanley), but the company is hoping that by further expanding beyond the traditional on-demand transportation model, it can tap into another parallel area of demand. And add an additional revenue stream to support its black car service in the U.S.

5957006693_e6a8f98d42_bHerman tells us that Gett believes that, by slowly adding a delivery service on top of its existing operation, it could have an ace up its sleeve. The startup began to test an on-demand delivery service over the holidays (beginning in mid-November) by offering to pick up toy donations from any address within New York City on-demand or pre-scheduled through its mobile app, in partnership with Toys for Tots.

With its charitable toy delivery promotion having found traction, the company says that it will be looking to significantly expand its on-demand delivery service in the coming year, with its network of drivers providing the foundation for the new extension of its model.

As to its success in NYC, Herman tells TechCrunch that it has attracted over 100,000 customers in New York City alone since launching, adding to its million-plus users around the world. The Gett CEO also claims that, thanks to its enterprise accounts in other countries, the company now has the highest margins of all transportation apps. He claims that Gett is now operating between 20 to 30 percent margins compared to Hailo at 10 percent and Uber at 20 percent, though we’re still waiting for verification on this from competing services.

Furthermore, Gett appears to now be rivaling Lyft in the revenue department, as the CEO says that the company achieved a gross revenue run rate of more than $ 100 million in December. Furthermore, he says that the business is now “profitable in its first 20 cities” — even though Gett’s current total of $ 42 million in funding remains half of what Lyft has claimed from Andreessen Horowitz and others at $ 82.5 million.

The CEO tells TechCrunch that he sees New York City as the key area of opportunity for the company’s growth going forward and will be going “all in on NYC next year.” Demand has been doubling every month since launch, he says, and the company will soon have 1,000 cars operating on the streets — which he expects to significantly increase in early 2014. With Lyft currently absent in the NYC market and Sidecar having shut down, the CEO says that he wants to turn the perceived Lyft vs. Uber battle in the U.S. into a more focused battle between Gett and Uber in New York City.

1_TaxiArriving_NYCTo do so, Gett launched a new version of its app for iOS this week (and updated Android and Blackberry as well), bringing a slick, redesigned interface to its mobile experience, including, among other things, a new interactive mapping feature.

The company has also remodeled the app’s search functionality to offer better results and faster navigation, particularly when it comes to contextual results. In particular, the new app makes it much easier to search for points of interest nearby, for airports by terminal, as well as for hotels and restaurants.

The app is also now compatible with iOS 7 and the latest iterations of Android and, Shelly Palmer at the very least, thinks that the new app makes Uber look like “sticks and crossbows.” (Whatever that means.)

It’s still early for on-demand transportation companies, in New York City especially, and it’s not clear whether Gett’s impending delivery service will be an intelligent extension to its business or a distracting gamble. However, judging by current growth across its first 20 markets, Gett might soon be making a case for the addition of its name to the race for dominance in the on-demand transportation market.


TechCrunch » Social
Rip Empson

Indian Music Streaming Startup Dhingana Faces An Uncertain Future After T-Series Pulls Its Licensing Agreement

Dhingana 3

Indian streaming music startup Dhingana faces an uncertain future after T-Series, its biggest music label partner, said it will not be renewing their licensing agreement.

Soundbox reported last week, and T-Series president Neeraj Kalyan confirmed to TechCrunch, that the company will not renew the license set to expire for nearly 8,000 songs from Dhingana’s catalogue. “We were not able to see much traction in the service and secondly we couldn’t agree on the commercials and both parties thus decided to part ways in an amicable manner,” said Kalyan.

However, it looks more like a near-death experience for the music service and not an imminent shutdown. Dhingana CEO Rohit Bhatia said that any new developments will be shared this week. He declined to comment on whether Dhingana will indeed shut down.

Any recovery from T-Series ending its licensing agreement would depend on whether Dhingana can overcome the hurdles of poor ad rates, rampant music piracy, and rising costs of supporting its free service in the country — issues facing every streaming service in the country.

Dhingana is among the top-funded music startups in India. It raised $ 7 million in Series B funding in October last year from Lightspeed Venture Partners, Inventus Capital Partners and Helion Venture Partners. Bhatia told Medianama that Dhingana is in the process of restructuring its operations.

Dev Khare of Lightspeed declined to comment on Dhingana, and executives at Inventus Capital (another investor in Dhingana), also refused to comment.

Another source, a music industry executive familiar with Dhingana’s negotiations with T-Series said Dhingana didn’t agree to the music label’s commercial terms and more importantly, was running out of money. “T-Series’ exit is a trigger, but Dhingana’s problems are much beyond that,” this person said over the weekend.

The Challenges Facing Music Streaming In India

Earlier this year, India’s largest e-commerce company Flipkart shut down Flyte, its digital music store, citing piracy and complex payment mechanisms among the top reasons for the decision.

Whether or not Dhingana shuts down, being a pure-play streaming music startup in India is going to get tougher for sure.

There are some big challenges facing both the free streaming and the pay-for-download models in Indiamusic piracy is clearly the toughest to battle, with most consumers still preferring to download free music from illegal sites like http://www.songs.pk. The other challenge is that most big music labels demand stiff fees for awarding any digital music rights apart from the per-stream cost for each of the songs.

The recent Bollywood hit Chennai Express for instance, sold music rights for an estimated $ 2 million. The music labels want bang for their bucks and they cannot achieve that by being too generous in their commercial arrangements with the streaming services.

The Holy Grail for all these music startups is to reach a scale where they are more comparable with a Spotify. But as the CEO of one of the music startups in India told me over the weekend, becoming a Spotify will require very deep pockets, enormously patient investors and, above all, an industry where more consumers are willing to pay for legal music downloads. Unfortunately, that’s not the case. India’s media and entertainment industry loses about $ 4 billion every year due to copyright infringement.

Telecom operators like Vodafone on one hand, and aggressive Internet platforms like YouTube on the other, are threatening to hit these pure play music startups very hard. YouTube’s rumored music streaming service on top of what it already offers is set to put more pressure on advertisers to increase their ad spending with Google.

So will other music-streaming services face this ‘loss of faith’ from music labels?

Gaana.com (backed by Times Internet Ltd) and Saavn (the Spotify for Indian music), continue to survive and even expand their services, thanks to the deep pockets and some innovative business models. Their success (so far) also reflects that the digital music scene in India may not be so gloomy after all. Gaana has around 7.5 million monthly active users.

Satyan Gajwani CEO of Times Internet, which owns Ganna, said the focus is more on building consumer habit of paying for legal music.

“We have started to convert free users into paid ones, but our primary goal today is to build the habit of using Gaana before piracy, and we are confident over time of converting free users into paid ones,” he added.

Saavn_Shazam_Screenshot_JPG[4] copy

Saavn CEO Vin Bhat told me that despite challenges of music piracy and competition from Google’s YouTube in getting a bigger share of the ad market, there’s a large addressable market in India. Already, almost half of Saavn’s 11 million monthly active user base is from India, and it’s growing.

Kalyan of T-Series added that it will continue to work with Saavn, Gaana and others, as these platforms continue to show good traction.

“The streaming business has to slowly move from free economy to paid economy as sustainability of ad-supported revenue model is a big question mark. Free music is a very dangerous thing, and we would not like our next generation grow up believing music is for free,” Kalyan said.

Lead picture courtesy Soundcloud.


TechCrunch
Pankaj Mishra

Launched 14 years ago and achieving $ 62 million in EBITA in 2012, online survey company SurveyMonkey is a veteran of the Silicon Valley startup scene. With more than 14 million users globally, the company is now keen to boost these numbers even more by upping its presence in Europe. It announced a new London office last week and is now scouting German cities for potential locations.

A European focus isn’t the only thing on the company’s agenda this year: In January it quashed rumors of an upcoming IPO (for now, at least) when it announced a massive $ 800 million in equity and debt financing, with CEO Dave Goldberg making it clear that going public is not a priority at the moment.

We caught up with Goldberg while he was in Berlin on a whirlwind business trip to launch SurveyMonkey Enterprise, the company’s new product aimed at businesses, in Germany. He told us why the German market is a top priority, which Berlin companies have caught his eye and why VCs are “fundamentally lazy.”

To start off with, what are you doing in Berlin?

I’m here because we’re officially launching our SurveyMonkey Enterprise product in Germany. We announced the product in the US a few weeks ago and it’s a pretty big deal for us because it targets businesses and organisations that have multiple staff using the product. It allows teams to collaborate and use SurveyMonkey together – previously users could only have individual accounts – and companies also gain comparison features to help them get the most out of their data.

We’re also here because we plan on eventually having a sales team in Germany. Part of what this trip is about is figuring out where in Germany works for an office.

Is Germany an important market for you?

The thing is, the company is 14 years old and you’ve always been able to create and take a survey in other languages but the site was only in English until about three years ago. Since the site’s been in German, we’ve grown very quickly here. Basically, we’ve been doubling year-on-year. So while Germany is our largest market in the EU, outside of the UK, it’s still a fraction of what it could be. But we are the largest survey company in Germany, there’s lots of competitors — we’ve found about 30 direct ones — but they’re all pretty tiny.

We have a lot of big German companies as customers already – Volkswagen has just signed on for the enterprise product and we have Siemens, SAP, Bosch, Dyson, along with local governments and universities using us. We have almost 200,000 users in Germany.

So you launched the site in different languages only three years ago? Why did this take so long?

A little over four and a half years ago is when I joined and we bought control from the owner. He’d done a great job, it was a great and profitable business but it was still only twelve people and only two of them were engineers. They’d made a product and it worked and scaled, but they didn’t have the resources to do other things, and one of them was languages and currencies. So we had to figure out creative ways to offer new languages, currencies, payment types. Firstly, I had to hire a team and then we had to do the work. But three and a half years ago, when we launched in German, we still only had about 35 people at the company. Now we’re around 280.

That’s very rapid growth. How did you manage the transition from a small team to close to 300 staff?

The goal is to still try and think as much like a startup as possible but also put some processes in place to handle the growth. The best way I’ve figured out to do this is to hire people who understand both sides – so have experience working in a startup and a corporate environment.

You’ve been quite vocal about not going public, announcing $ 800m in debt funding and equity early this year instead. Why choose this route?

The idea was, we’d done pretty well and were wondering how we could get liquidity for some of our investors and employees. The problem wasn’t going public, but being public and having to run the company to hit quarterly financial targets and not being able to make longer term strategic decisions.

We felt if we could get the money and get investors and shareholders to sell their shares for a good price without going public that would be a better choice. So all the money went to investors and employees, it didn’t go into the company – the company is very profitable. We’d only go public if we get some benefit other than liquidity, all of the new investors understand that it may never happen — that was part of the criteria of who we picked.

You were previously at Benchmark as an Entrepreneur in Residence – from your investing background have any Berlin startups caught your eye?

I know SoundCloud very well, I met Alex (Ljung) a couple of months after he started and am really heartened to see what they’ve done, and I know Jimdo too. Through Benchmark, I followed ResearchGate. Those are the ones I know the best. They’re all great companies – great teams that aren’t just building local businesses for Germany, but global companies.

The thing is, it’s very hard to get Silicon Valley VCs to fund anything that’s outside of Silicon Valley. I mean, it’s hard enough to get them to fund stuff in Chicago, let alone Europe! So people think they don’t want to go to Europe, but the truth is they don’t want to leave their own backyard. Fundamentally, VCs are lazy.

We do occasionally hear of Silicon Valley VCs funding Berlin companies though…

Yes, and it’s a big vote of confidence for those companies — I mean if you can get funded by a Silicon Valley VC and you’re not in Silicon Valley, that means you’re really good because they really don’t want to get on a plane. And its so easy for them to fund something that’s local, and so hard for them to fund something that’s not.

One of our investors is Tiger Global and they’ve been very very successful international investors and that’s one of the reasons we brought them in – because we wanted their help to grow internationally.

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This story originally appeared on VentureVillage.


VentureBeat » Entrepreneur
Michelle Kuepper, VentureVillage

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The post Cast a wide net, have lots of ideas and go hard until one of them sticks [VIDEO] appeared first on Anthill Online.


Anthill Online
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