Millward Brown, has released its annual top 10 digital and media predictions, highlighting growing trends in the media sector.
They expect 2013 to be another dynamic year for online display, mobile and social media. Consumers have ever higher expectations of intelligent digital advertising approaches, and marketers will need to deliver more sophisticated campaigns to keep pace with what works.
Last week a customer from Toronto named Isabel M. got onto a website created by McDonald’s Canada, which allows customers to ask any question they want. Her question was, “Why does your food look different in the advertising than what is in the store?” Looking at this as an opportunity to get some good public opinion going in favour of McDonalds, Director of marketing for McDonald’s Canada, Hope Bagozzi, addressed the question herself.
Bagozzi enters a typical McDonalds and orders a quarter pounder and takes it along with her to the Watt International,the advertising agency, to get it shot. McDonald’s claim is that the only doctoring they do is to make the ingredients visible so the consumer. Towards the end, Bagozzi also adds that the photoshop they use on the final images is only to “enhance the color and any accidents that might happen during preparation, which obviously doesn’t show the product in its best light.”
I am impressed with courage to take the customer behind the scenes. What do you think? Are revealing videos like this a good marketing strategy for McDonald’s? Or is the risk of potentially negative PR too great to consider something like this for your own company?
What are the reasons that some startup succeed while some fail? Why do products instantly attract a multitude of users while other still lag at user acquisition, even after considerable marketing expenses?
The answer to this can be a variety of reasons such as user interface, design, customer service, utility value and sometimes even price. But very often one feature that gets left out is the impact and support of the community around.
A vibrant community can be a magical marketing and sales tool for a startup. While it is imperative for a startup to have a great product/service, an enthusiastic community around it can aid the company in garnering more attention, providing insights and gaining critical early feedback
While in India, our ecosystem surrounding Startups is still in the nascent stage, there are communities developing in Bangalore and around the Delhi/NCR region. One of the biggest problems facing tech entrepreneurs in India is the relatively small number of early adopters. In an excellent article about the “two speed” state of Indian market adoption, Mukund Mohan writes, “The Innovators (less than 1 % of the population or 12 Million individuals) in India (entrepreneurs mostly) who conceive and develop products for the Indian market and the early adopters (less than 5% of population or approx 60 Million individuals) together make up the entire “early adopter” category. Unfortunately less than 30% of them have both the interest, and the desire to be early adopters of technology.”
If you are a technology company, how do you build a community around your company?
1.Start early; make the community an integral part of your system: Start a blog before you actually launch and let people know what you are doing. Building a community takes time. Be patient.
2.Value your initial customers: Those first few people who sign up for your product are there out of choice, they have found your product and they are sticking by it because they love it. Treat them well. Value their feedback.
3. Let your customers know they are special: Marketing dollars might get you signups but word of mouth will get you user engagement. Don’t just value customer feedback; let your customers know that you are ‘listening’ and that you value their feedback.
4.Establish a mutual relationship: Once your community starts growing, as difficult as it might be, acknowledge contributions and hold events where your customers can interact with you or your team. This can act as a cohesive force and take people beyond just a bunch of people using your product
In a day and age when online customer loyalty isn’t really high, a community around your product can not only be your loyal user-base but also your very own cheering squad.
As an entrepreneur, scaling your business is both an exciting and difficult task. You have a great idea, a great team, and an interesting business model but moving from 5,000 customers to 500,000 and then five million is a complicated and capital-intensive process. For enterprises that aim to create social impact, an added component is that the product or service also serves to impact a social issue. How do you convince an investor that your business is the one to invest in? How do you learn the investor’s language so that your business is communicated as a viable and scalable prospect? Most importantly, how do find the investor best suited to your business?
Here are five tips to get the most out of your investor-entrepreneur relationship:
1. Understand Your Business Model Investors want to know that you know your business inside out. A great pitch comes from someone who doesn’t need to look at their PowerPoint. Being able to cite your financials from memory will really impress an investor and differentiate you from other promoters. Providing a clear understanding of where you are now will convince an investor that you can accurately predict where your business is headed.
2. Identify the Relevant Investor With the mushrooming number of seed stage funds, impact investors, angel investors and venture philanthropists, in addition to mainstream venture capitalists and private equity funds, the investor landscape is becoming increasingly complex. Find the right investor faster by knowing exactly what level of funding you require and what investors work in that bracket and what they are typically looking for. For example: high net worth individuals typically look for return on investment, while venture capital funds look for financial returns in addition to scalability and exit.
3. Accept That You Have Competition It is highly unlikely that your business model is unique and no one has ever thought of it. Chances are that investors have seen it or something like it before, considering they see hundreds of business models a year. What they are betting on, however, is a host of other factors that differentiate you from your competitors and your ability to leverage these. Therefore, don’t hide that there is competition, just prove that you can do it better.
4. Remember That Investors Want to Grow Your Business Investors are interested in investing in models that are scalable. An asset-heavy model where a large percentage of invested capital is poured into infrastructure is far less attractive than an asset-light model where the product being invested in can be replicated without a long gestation period.
5. Go to Market When You Don’t Need the Money The best way to get an investment is to show the investor that your business will be fine without their money. Plan ahead. Start your investor outreach a year before you will actually need their investment. Don’t obsess over receiving investment, obsess about increasing your revenue. Investors will fund you the moment they feel that you will succeed without their money.
Read the original post at the Sankalp Forum Blog. The information in this post is based on workshops and lectures at the Sankalp Residential Bootcamp held at ISB Hyderabad. All rights reserved and Copywrite Sankalp Forum.
A recent clause in India’s 2012 Budget proposes taxing Indian start-ups 30% of the amount invested by Angel investors by terming the investment as income.
The Memorandum of the Finance Bill 2012 states “It is proposed to insert a new clause in section 56(2). The new clause will apply where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares. In such a case if the consideration received for issue of shares exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income tax under the head “Income from other sources. However, this provision shall not apply where the consideration for issue of shares is received by a venture capital undertaking from a venture capital company or a venture capital fund.”
Where does this leave entrepreneurs who get Angel funding pretty early in the start-up life cycle when perhaps the only assets they have is a great idea on its way to execution?
In the Hindu Businessline, Mr Saurabh Srivastava, co-founder of Indian Angel Network, explains: “An angel investor may invest Rs 1 crore in a company that has no revenues and no profits and the tax official, unless otherwise ‘persuaded’, would tax the company at 30 per cent for no reason at all and convert an investment into income.”
Possible ways of working around this clause are suggested by Deepak Shenoy, who is a co-founder at MarketVision. He says, ” If you are a founder, you could use a sweat equity approach or use convertible debentures or since the law applies only to companies, you might be able to start a Limited Liability Partnership. Read his in-depth analysis here.
On a similar note, the U.S is mulling passing the “Entrepreneur Access to Capital Act,” (Pdf Link) which allows entrepreneurs to raise up to $2 million from individual investors without having to be approved by securities regulators. You can read more about this on his blog here.