The latest from TechCrunch
- Users Say They're More Likely To Buy If A Business Answers Their Question On Twitter
- Netflix For Pandas
- What Makes A Startup Successful? Blackbox Report Aims To Map The Startup Genome
| Users Say They're More Likely To Buy If A Business Answers Their Question On Twitter | Top |
| Currently I am not in Cancun . The reason I am not in Cancun is out of my control (an over three hour Virgin delay on the tarmac at JFK caused me to miss my connecting USAirways flight at SFO). I spent a good part of those three plus plane-trapped hours bitching on Twitter, asking both the @VirginAmerica and @USAirways Twitter accounts for guidance, because calling their respective 800 numbers either put me on hold or wouldn’t go through. Guess which Twitter account responded? Guess which one I’ll consider purchasing tickets from again. And according to a recent survey of 2049 Twitter users completed by Twitter Q&A search service inboxQ, I am not alone: 64% of the inboxQ survey respondents were more likely to make a purchase from a business account that answered their questions on Twitter, 24% were just as likely and only 12% were less likely. Another added benefit of answering user questions on Twitter (ARE YOU LISTENING @USAIRWAYS ?) is that users are more likely to follow a business that answers their questions, at 59% versus 29% who are just as likely and 12% who are less likely. The inboxQ survey results are filled with other lovely “well duh” info nuggets like how users with high follower accounts are more likely to receive answers to their questions, at 41% respondents with more than 100 followers receiving an answer from a business versus 21% with less than 100 followers (Maybe brands don’t think its worth the effort? Or maybe the questions from low volume accounts get lost in whatever social media monitoring service businesses are using?). In any case, pro tip: If you’re a business serious about user engagement on Twitter, go out of your way to sincerely answer sincere questions from users, no matter how many followers they have. They might just end up buying something. Or not hating you . @bmull Brenden Mulligan I specifically this (6 hour) @ usairways flight because they advertised it had wifi. But it doesn't. Boarding for my last @ usairways flight! about 9 hours ago via Twitter for iPhone Reply Retweet Favorite CrunchBase Information Twitter Information provided by CrunchBase | |
| Netflix For Pandas | Top |
| This guest post was written by Ethan Kurzweil. Kurzweil is a Vice President with Bessemer Venture Partners in Menlo Park, California. He works with Internet companies of all types, including Playdom, Zoosk, Crowdflower, Twilio, adap.tv, Reputation.com, Skybox Imaging, and OpenCandy. You can find him on twitter at @ethankurz . The views expressed in this post are his own, and do not represent those of Bessemer. Hardly a day goes by anymore when I don't hear about a reportedly "radical, new" business concept summarized succinctly as "X" (some well-known existing business) for "Y" (some specific market segment, use case, or other qualifier). These descriptors range from the logical – "Groupons for Moms" (okay, clear enough) – to the absurd – "Pandora for Cloud" (huh?). Often, I don't even understand the analogy, as it's so obscure, or I have never even heard of the company being compared. Sure, these monikers may satisfy our need for efficiency and brevity, but I'm convinced that in the long-run, we need to expand our collective attention spans just long enough to really describe what our businesses do. Otherwise, we run the risk of setting a model for entrepreneurship that's entirely devoid of creativity and true innovation. I see two primary problems with the current state of affairs. First, we're losing the ability to appreciate a truly novel business concept that doesn't boil down to a knockoff of something that already exists. And when I say we, I'm referring to a large number of us in the startup community – angel investors, VCs, entrepreneurs, executives; we've all adopted the convenient shorthand of translating new business ideas into three words. Having a short elevator pitch that neatly summarizes a new idea is important, but constraining such descriptors to less than a tweet is a step too far in my view. It's understandable of course given the sheer number of new companies being formed every day, that we would need a shortcut for describing new concepts quickly. But this inevitably leads to constrained thinking as to the strategy and business model to be applied to a particular product or service. If Google had thought of itself in the early days as "Yahoo for better search results," they may not have happened upon the juggernaut business model that is AdWords. More alarming is our natural tendency to evaluate a company's prospects as an offshoot of the success of the descriptor. Would anyone have taken Groupon seriously if we had referred to them in the early days as "some Chinese company that no one has heard of for the US"? My second concern is even more cause for alarm as this way of thinking is quickly becoming a self-fulfilling prophecy – at least based on the business ideas I hear about. This is not surprising since entrepreneurs take note of and emulate companies that get funding, press mentions, social media glory, and perceived traction – then turn around and get that same publicity with their copycat, reinforcing the same behavior. This sends a clear message that budding entrepreneurs should pick an idea only slightly dissimilar from something that already exists, get it out there quickly (because someone else is probably working on the same copycat), and then sit back and cash their ticket to fame and fortune. Even worse is the message that entrepreneurs should be afraid to champion an idea that's so new, it simply can't be categorized, because investors and others just don't know how to pigeon-hole it yet. We could end up unwittingly deterring the future Google and Facebook founders out there from ever getting started. To be clear, it's certainly not the case that a knock-off idea can't be a good business – and often these kinds of derivatives pivot from the original idea to something different and, hopefully more innovative. But the odds of a true homerun for this model of company are exceptionally low and we need to stop glamorizing this model of entrepreneurship. Think of all of the truly revolutionary businesses and business models out there, and you've rarely heard them described in knock-off terminology. Pandora toiled for years in relative obscurity, ignoring popular sentiment that you couldn't build a successful Internet music service with advertising, only to be saved by the groundswell of support from their users lobbying to keep them alive and profitable. Zynga built applications on a platform with no demonstrable track record or model for success. And the Twitter founders conceived of an ingenious and quirky way to let people share their thoughts, one sound bite at a time. Nowhere along the way did Larry, Sergey, Zuck, Jack Dorsey, or the other founders of great Internet successes study some other business and wonder – what's some nuance of that other successful company that I can replicate? Instead, they focused on previously unsolved problems, and, by addressing these needs, built powerhouses that will forever shape the way we entertain, live, work and communicate. So the next time I hear "Airbnb for Endangered Species," I'm going to tune out and browse "Myspace for People that Use Their Real Name" and "Facebook Status Updates for people that like to express thoughts in 140 characters or less" instead. Image by kubina on Flickr | |
| What Makes A Startup Successful? Blackbox Report Aims To Map The Startup Genome | Top |
| Generally speaking, the odds are stacked heavily against the average startup. The rate of failure among entrepreneurs and startups is startlingly high — it comes with the territory. Otherwise, entrepreneurs wouldn’t be pirates . But, what if there were a way to reduce that failure rate by cracking the formula of startup success? No easy feat to map the double helix of startups, but entrepreneurs are risk-takers by nature, so four of these risk-loving international entrepreneurs came together to found the Startup Genome Report , a report that is part of a larger project that dives into the very anatomy of what makes Silicon Valley startups successful — or not. The entrepreneurs who founded the Startup Genome report (Bjoern Herrmann, Max Marmer, Fadi Bishara, Aleksandra Markova), have also created a business accelerator called Blackbox , which will be leveraging the data they have collected (and will collect) from their ambitious R&D enterprise. The Startup Genome Report, as it is today, is a 67 page analysis on data collected from 650+ web startups. The entrepreneurs recruited both UC Berkeley and Stanford faculty members, like Steve Blank , the Sandbox Network team, the Startup Bootcamp team, and the Pollenizer team, to help coauthor and contribute to the study. The goal of the report is to lay the foundation for a new framework for assessing startups more effectively by measuring the thresholds and milestones of development that Internet startups move through. Blackbox, which was co-founded by techVenture and other organizations that have a track record of working with 100+ startups, including 15 exits (such as Bebo, Tapulous & Lala), hopes to use the Startup Genome Report as a cipher to help crack the innovation code, and give fledgling entrepreneurs and startups from around the world access to the characteristics and qualities that make Silicon Valley companies successful. Here are 14 of the most interesting trends identified by the Startup Genome Report, some of which are intuitive and some of which may come as a surprise. Among them? Investors may be less help than they think. Take a look: Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth. Startups that pivot once or twice times raise 2.5x more money , have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all. Many investors invest 2-3x more capital than necessary in startups that haven't reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success. Investors who provide hands-on help have little or no effect on the company’s operational performance . But the right mentors significantly influence a company's performance and ability to raise money. (However, this does not mean that investors don't have a significant effect on valuations and M&A) Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects. Balanced teams with one technical founder and one business founder raise 30% more money , have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams. Most successful founders are driven by impact rather than experience or money. Founders overestimate the value of IP before product market fit by 255%. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely. Startups that haven't raised money over-estimate their market size by 100x and often misinterpret their market as new. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team. If you’re interested in learning more, detailed analysis of each of these points can be found in the full Startup Genome Report . The team is also introducing a new survey that aims to help entrepreneurs understand the stage their startup is in and gives them personalized tips and advice for what to focus on based on data from the research project. The more data the project collects, the more accurate its conclusions become, and the more entrepreneurs and their startups can benefit from that knowledge, so check it out here . CrunchBase Information blackbox Startup Genome Project Information provided by CrunchBase | |
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