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Some Scary Realities Investors Face with the Snap IPO

Some Scary Realities Investors Face with the Snap IPO

Ahead of the Snap IPO, some scary realities are coming to light.

OK – let me start off by acknowledging the fact that I’ve talked about this topic ad nauseam, but as we’re only a day away from the Snap IPO, I feel it is my duty to share with you some final thoughts about the biggest tech IPO in quite some time. After all, the company is looking for a market valuation of up to $22 billion, so at the very least, it’s worth discussing.

Profitability

In 2016, Snap’s net losses were $514.6 million, and it has noted that it ‘may never achieve or maintain profitability’. That’s standard practice for any startup, and Snap’s 2016 was a big year in terms of innovation, product research and development, product launches, acquisitions, and more money-draining activities. They also saw their revenues shoot up significantly, but remember that 2016 was their first full year of sales, and there were plenty of marketers and big spenders looking to get involved with the medium in terms of advertising. Snap still hasn’t created a product or service that appeals to SMBs in terms of both pricing, returns and data. This is an area of concern that I’ve noted for a while, and if they can’t create a product that non-Fortune 500 media companies can leverage, long-term sustainability is going to be a problem – assuming they continue to focus on themselves as a media company, and not a ‘camera company’ as they’ve indicated in their IPO filing.

Mission

Snap’s core product is Snapchat, and that has driven a lot of users to engage with the brand every single day. But Snap rebranded itself in preparation for its IPO and labeled itself a camera company. The launch of Spectacles created a lot of buzz, but that buzz has turned into novelty. Are people really going to walk around all day with (ugly) glasses that record brief videos of what they’re doing? The short answer is no. And that reality has hit quickly in places like San Francisco and Los Angeles, where the streets are littered in sunglasses-clad individuals, and none of them wearing Spectacles. It also doesn’t help that they are wildly overpriced (at the moment) and offer no real value beyond the excitement of using new technology.

Snapchat Spectacles Manhattan Pop Up Shop
A long line forms outside the now-closed Spectacles pop-up shop in NYC.

It’s easy to get early adopters excited enough to fill a Manhattan pop-up shop, but a few pictures of long lines are good short-term PR, not a long-term sales strategy. Google Glass, the 3D printer market, and a whole lot of wearables also confused novelty with business value. Where are they now? That also opens the door for another major red flag with Snap.

Control

In a first-of-its-kind IPO, Snap will not be offering any voting rights to its new shareholders. Snap’s done a great job of building a product that over 150 million people like and use, and they have turned that into a media platform that big-budget advertisers are willing to pay for, but let’s be frank, they’ve made a lot of big mistakes when it comes to their business moves. They tried offering Lenses for purchase to users a month after the product was released and were lampooned by customers. They have also moved backward in terms of the user-friendliness of once-beloved products like Stories, which has made way for Instagram to catch up and, in the opinion of many, surpass Snapchat. With years – YEARS – of time to innovate and evolve, how has Snapchat allowed an incoming product that is very clearly a conceptual copy (Instagram Stories) to overtake its market share and blame that product on Snapchat’s slowed user growth (more on that below)?

It should scare investors that leadership refuses to give up any control in terms of how day-to-day operations are conducted considering the major missteps this leadership has made once competition has arrived on the scene. Yes, competition will always mean unprecedented hits to metrics such as growth rates and usage rates. That’s just a reality of doing business. You would think, however, that Snap would have planned for the arrival of a competing product considering Facebook made it very clear that they wanted a part of the pie Snapchat had to itself for so long.

Excuses

I have already mentioned the always-troubling statement that startups make regarding the possibility of never achieving profitability. That’s standard, so it can be overlooked by potential investors. What can’t be overlooked, however, are the excuses Snap is making for its slowed growth.

First of all, there is the major concern regarding innovation. Instagram has a better user interface, appeals to a global market (instead of almost exclusively an American market, as with Snapchat) and appeals to a broader range of age demographics (most of Snapchat’s active users are under 25), which is why Instagram has caught up to Snapchat in terms of innovation and usage. Competition is not an excuse for slowed growth, but it was used by Snap as the reason user growth was flat in the final quarter of 2016. When Twitter growth flattened in late 2015-early 2016, many assumed the company was dead in the water and poised for a hostile takeover or acquisition. It’s not all that reassuring that Snapchat user growth is flat pre-IPO.

It is also hugely troubling that Snap has indicated to investors that engagement and growth have slowed because teens and Millennials are not brand loyal. I just finished writing “Marketing to Millennials for Dummies” as part of Wiley’s “For Dummies” series, so I read through and conducted plenty of research into the psychographics and loyalty habits of Millennials. Put simply, Millennials are extremely loyal. The difference rests with the fact that they are not all that interested in the stature of a brand, but rather with the degree to which they can relate to a brand on a personal level. If they are fatigued by Snapchat, it is because Snap has not done enough to connect with them personally or innovate in a way that the market has indicated it wants. To blame it on Millennial and teen consumption and loyalty habits is lazy, ignorant, and from an investor standpoint, very unsettling.

Conclusion

It will be very interesting to see what happens when that opening bell rings. Does Snap have the momentum it needs to rise to the levels of Facebook, or will it crash and burn based on market response? Only time will tell.

There Are More Marketing Technologies Than Ever

There Are More Marketing Technologies Than Ever

Every year (since 2011) Scott Brinker of ChiefMarTec.com releases the marketing technology landscape supergraphic, and this year was the most impressive one yet.

In 2011, there were about 150 marketing technologies categorized by Scott Brinker’s supergraphic. A lot has changed in the last five years. Now, as you can see below, there are over 3,500. That’s almost double what we saw last year (~1,800) and a market that has grown more than twentyfold since Brinker and his team started taking stock of what’s available on the market.

Marketing technologies for each category

One of the more popular questions I am asked by clients and at conferences (and one of the questions I hear most often when sitting in on a session or webinar) has to do with these marketing technologies. More specifically, “What is the best tool for [INSERT TASK HERE]?” I always answer that question the same way: There is no one perfect tool, and anyone who tells you that they’ve found it or created it is lying. Simply put, the perfect tool for you will depend on your objectives and whole host of other variables.

With a market that has grown as significantly as the marketing technologies space, you would think that by now, one of these clouds or suites would do it all. That couldn’t be further from the truth. As more of these technologies sprouts up and claims to solve the last of your problems, the more difficult it becomes to identify the diamonds in the ever-expanding rough.

Some Positive Realities

It is encouraging to see that the largest categories in terms of available technologies (by volume) are also the ones related to the hottest topics of the day:

  1. Sales Automation, Enablement & Intelligence (220)
  2. Social Media Marketing & Monitoring (186)
  3. Display & Programmatic Advertising (180)
  4. Marketing Automation & Campaign/Lead Management (161)
  5. Content Marketing (160)

We’re seeing data make its way to the top of everyone’s must-have list, and the tech market is responding accordingly. No longer are these tools reserved for the largest of the large, and the richest of the rich. Data and business intelligence are crucial to businesses of all sizes, and the supply is starting to catch up to the demand.

Another bright spot is the fact that we are starting to see a trend of openness, as opposed to the Oracle model, which has long aimed to close off its acquired technologies to other Oracle products alone. Now, technologies are being built with the pseudo- or custom-cloud in mind, whereby marketers develop their own suite of tools as opposed to relying on the Salesforces and Microsofts of the world. So while the perfect savior tool might not yet be available, marketers can now have an easier time building a version of their perfect tool, once again rooted in their needs, capital and time.

The Future of the Industry

In a market where the number of active players has nearly doubled in a single year, watching tech stocks face valuation slashes (see my articles on LinkedIn and Snapchat) can’t be something anyone is too excited about. And while there are plenty of categories from which to choose, anyone can tell you that in the next few years (my estimates put it within 24 months) there won’t be enough room for 186 social media marketing companies, for example.

Every one of these spaces is becoming increasingly crowded. Most of them, at this point, are probably already overflowing with waste. It won’t be long before we start to see significantly more consolidation (something we have already started to see) and significantly more of these houses closing shop. The good ones (for the most part) will stick around, as they so often do, but as the market starts to balance, the best will be absorbed while the rest are extinguished.

So, while I would strongly advise testing and piloting everything that you think might be the perfect product for your needs, now is a time to be wary of any newcomer, as you’d hate to invest your resources (time and money) into a product that only has a few months or a year on the market.

My (Official) Thoughts on Snapchat

My (Official) Thoughts on Snapchat

No one can deny the unbelievable power of this social media juggernaut, but where does it fit in the world of marketing?

Snapchat launched in 2011. About a year later, it was on my iPhone and I started sharing. It wasn’t long before (almost) everyone I knew was using the app, and not too long after that, I read about how Spiegel and his gang turned down $3 billion in cash from Facebook. As someone who has yet to be offered such a huge sum of money (fingers crossed!) I couldn’t comprehend how anyone could turn it down. And I know I wasn’t alone. But, by all accounts, it seems like the Snapchat team made the right move. (At least for now; let’s see if Wall Street continues its devaluation tirade.) So here we sit, about three years later and Snapchat holds a lofty valuation of $16 billion (after a recently closed $175 million round of funding).

Snapchat and Marketing

Let’s Look at the Valuation

The $16B valuation is flat with the round raised in May 2015. But, as a recent Vanity Fair article points out, a flat valuation at a time where banks like Morgan Stanley and funds like Fidelity are slashing portfolio valuations is something to be proud of. Even Snapchat isn’t immune; Fidelity knocked the high-flying Icarus out of the sky in November with a 25% writedown. (Of course, they just led the new round of funding, so read into that as you will.)

The point is, the tech world is in the process of balancing itself out. A little over 15 years ago, money was pouring into tech companies (that returned absolutely nothing) and Wall Street went belly up when the sky came crashing down. This devaluation comes at a moment of sobriety where smart investors realize they don’t want to repeat the mistakes of the past. Snapchat is exciting, and it resonates with a coveted demographic: millennials. So while the Zenefits, Palantirs and Dropboxes of the world are getting serious wake up calls (you can’t just take money forever and not be expected to pay it back) Snapchat still has some rope to work with. But that rope is getting shorter.

Intentional Hurdles

Right now, it costs $750,000 a day to advertise on Snapchat. To say that there are very few brands that can afford that is an understatement. The kinds of brands with six-figure daily ad dollars are very few and very, very far between. But that’s more or less the idea: in Snapchat’s eyes, if you want mom n’ pop shop ads appearing everywhere, you can spend your time on Facebook or Twitter. The limited (and, so far, coveted) ad space that Snapchat offers goes only to those deemed worthy.

This business model looks great when it is first rolled out. After all, everyone knows about Snapchat and its audience of 13-24 year olds (and yes, they say 13-36, but 77% of Snapchat users are under the age of 24), so when they announce that they will be selling ad space, the largest brands in the world tear open their wallets to the tune of $10 million commitments. But most brands and organizations don’t have anywhere close to that kind of spending power. So when a $100 million ad revenue is projected, it needs to be looked at a little more closely.

Snapchat’s ‘Run Rate’

In October 2014, Snapchat unveiled its ad model. They made about $3 million dollars over the course of the next few months. (They lost close to $130 million, but that’s the world of startups for you.) Then Discover launched, Viacom was signed up with several properties, and in the summer of 2015, Snapchat started looking at ‘selling’ its ad space overtly for the first time. Of course, at that point those wallets I mentioned flung open.

$10 million dollar commitments from several brands is impressive – there’s no question there. But let’s be realistic: Snapchat on pace to make $100 million per year if things keep moving the way they are is a concept that makes a lot of dangerous assumptions. Perhaps the most dangerous of all is that brands will derive measurable return from the network in the long run and continue to pour huge sums of money into disappearing ad space.

Snapchat’s Marketing Value

As I’ve mentioned, Snapchat is an exciting platform that is hugely engaging. We’re talking 8 billion video views a day huge. But Spiegel has not minced words when it comes to their approach to advertising: “We care about not being creepy. That’s something that’s really important to us. […] We think it’s weird when brands try to act like your pal [by tracking your web browsing habits].” (Source) That’s great for user experience, not great for advertisers. If I need to reach 18 year olds in the market for a first car with a high propensity to engage with digital ads, I won’t spend close to a million dollars a day to probably reach them. Once the novelty wears off, I’ll want measurable return and granular targeting. It seems like Snapchat is starting to accept that, and this kind of targeting is being rolled out (with criteria like age, gender, location, device and context), but more expansive interest and behavioral targeting will be a necessity for any long-term success.

On that same note, measurement is a real problem. On Facebook, I can tell you almost anything about the people seeing my ads because I outlined a very clear persona when I launched my campaign. What’s more, I can tell you everything that audience is doing from an engagement standpoint, and I can track all of that activity from the medium to my website. Snapchat started with views and reach. If we’ve learned anything from Google Display, views are pretty meaningless. Two seconds with more than 50% of pixels visible. So when I’m told that I received a million views, I have no way of knowing if that is worth my time. Slowly, Snapchat has been working to improve these metrics (for example, by partnering with Nielsen to provide more insightful and useful data). But the big issue (for me as a marketer) isn’t necessarily with either of these problems (both of which can and are being fixed by the platform). My issue has to do with using the platform to drive results for business objectives.

Snapchat is, by nature, a native product that is completely end-to-end (hat tip to Steve Jobs for the lingo). I, as a user, am not interested in clicking through to another source (be it a website or the App Store or what have you) while I’m using the app. I’m there purely to digest content and engage with a community. So when (if ever) Snapchat develops a more universal platform where smaller brands and organizations can afford it, how will they be able to justify the investment? Brand awareness and community development are extremely important; there’s not question there. But from an investment standpoint, will these intangibles (for the most part) be worth it?

My Official Thoughts

So here’s what I think about Snapchat.

I love the product. I think it’s brilliant and it keep getting better (with the exception of a few notable hiccups – paid lenses anyone?). I think that brand humanization potential is huge, and the ability to reach millennials is unparalleled. There is a vast array of potential when it comes to content, and people love digesting this content from both friends and brands (as we’ve seen with plenty of case studies). But, I think a long-run monetization of the audience will be next to impossible. We’ve already seen that with paid replays and paid lenses, the latter of which was one of the worst rollout strategies I’ve ever seen. (I won’t get into that here, because it could easily be another thousand-word article.) Millennials don’t want to spend money, so Snapchat’s only hope for revenue will be advertising.

For now, brands are willing to pay, and the future looks good in terms of targeting and tracking, but the platform is inherently limited in terms of its broad appeal. Barring a paradigm shift, the value in advertising on the platform will only be available to huge, global brands that find tangible value in impressions. Most companies, especially SMBs need results linked to revenue, and right now that doesn’t seem to be on the radar for the app.

There is a lot that marketers can do with the platform, and when it comes to personal branding, I can’t think of too many (any, really) media that do a better job of helping one build one’s brand and connecting with an audience (#KeysToSuccess). I look forward to seeing how brands and individuals continue to use it creatively, and to continue leveraging it in the work I’m doing, but I do wonder about the long-term. It’ll be fun to watch.

5 Buzz Words People Are Tired of Hearing (So Stop Using Them)

5 Buzz Words People Are Tired of Hearing (So Stop Using Them)

When it comes to marketing and startups, there are some buzz words that have been so overused that they cause more of a cringe than add value to a presentation.

We’ve all been there: listening to a pitch – whether it’s from a seasoned marketing veteran or a young entrepreneur – and hearing a buzz word that immediately draws our attention away from the presentation and onto the use of the term. We ask ourselves, “Why would they say that? It sounds ridiculous!”

While some of these terms are simple modifiers, others are industry titles themselves that are starting to cause more harm to businesses within those markets than good.

Revolutionary/Revolutionize

Virtually nothing you’re doing is ‘revolutionary’. Unless you’re finding cures or new treatments for diseases that have plagued mankind for centuries, harvesting solar energy in order to halt the reliance on fossil fuels for every person on the planet (thanks Elon Musk!), creating a market where one did not exist in the past, or something else on that scale, all you’re doing is offering a solution to a problem (a problem that, in the case of most startups, people didn’t even realize they had).

A mobile app that makes it easier to select a ringtone from your favorite songs, for example, is not revolutionizing the way we receive phone calls. In fact, using a term like ‘revolutionize’ to describe your product immediately devalues your service in the eyes of those to whom you’re pitching. If you plan on using the term (or something like it) you better hope that what you’re about to blow people away with what you’ve created. Otherwise, you’re only hurting yourself by setting expectations too high.

‘Big Data’

Plagued by its own hype, the term ‘Big Data’ has largely become synonymous with other passing fads, like ‘Pet Rock’. But that’s not the case! There are virtually endless applications to data – both ‘big’ and small sets – and the overuse of the term has resulted in people tuning out a lot of what comes next for one major reason.

People have short attention spans. They want immediate results, and when that doesn’t happen they look for the next opportunity for instant gratification. Just take a look at the Gartner Hype Cycle (pictured below):

Gartner Hype Cycle 2014

As you can see, ‘Big Data’ is on its way into the Trough of Disillusionment. (What a Kafkaesque name.) People are over all the hype and are now waiting to see what might actually come of it. That, combined with the fact that no real definition was ever offered, and the term was just loosely used has led to people scoffing at the term whenever they hear it.

Big data is amazing, but do yourself a favor and avoid referring to anything with the phrase in order to keep the attention on what you’re discussing.

Guru

If you’ve spent more than ten seconds perusing LinkedIn, you will have undoubtedly come across a self-proclaimed ‘guru’ or sorts. It is widely considered to be in poor taste to use terms like guru in your profile (particularly since you are describing yourself).

I once received an interesting piece of advice (that not everyone would agree with, but I do): Avoid using terms like ‘guru’, ‘expert’ or anything else that asserts your dominance in a field, as you are describing yourself in these cases. Rather, go into detail about your accomplishments and what has set you apart. Let others describe you as the expert – it goes much further.

Personally, when I see the term ‘guru’ used, whatever credibility had been built up around a profile is immediately shot.

Disruptive

You’re playing a dangerous game if you refer to your work/startup/app as disruptive and don’t have the data to back it up. Much like the term ‘revolutionary’, disruptive leads to an immediate judgment on the part of your audience. They want to know why, and if you’re not truly changing the way an industry works, you won’t be taken seriously. (OK – maybe that’s a little bit of a stretch, but you will have dug yourself into a hole that is hard to leave.)

Clayton Christensen (The Innovator’s Dilemma) coined the term ‘disruptive’ (in this sense) and the simple definition is as follows: a new breakthrough, technology or methodology that shifts an industry and forces incumbents to rethink the way they approach operations.

Unless you are doing that (think Uber/Lyft and the taxi industry) you’re not disruptive.

Engagement

What does engagement mean? This is a term so often associated with social media (another overly broad term) that it has lost most of its meaning. If I go into a presentation and talk about the great engagement we’ve seen on a campaign, the question will still remain: How are we defining engagement and what is this particular type of engagement worth?

Vanity metrics such as Facebook ‘Like’ count, Twitter favorites and Instagram ‘Likes’ have been long-standing tentpoles for engagement, but are those worth anything to a brand? And if so, what? When you want to talk about ‘engagement’ go a little deeper. Be more specific and assign value to these measurement criteria. You’ll look a lot better for it.

Conclusion

These are certainly not the only buzz words that get overused. There are dozens of terms that we hear every day that cause our ears to burn. Cutting these out and adding real value to a presentation or profile description can go a very long way.

8 Questions Every Startup Should Be Able to Answer

8 Questions Every Startup Should Be Able to Answer

There are a few common questions that every startup team will be asked – and should be able to answer.

Working in a startup – tech or otherwise – you are often asked a lot of the same questions. It can become repetitive (which means you’re working hard to get the word out) but it is important to have answers to some of the more frequently asked questions.

Questions startup should answer

These questions won’t necessarily come up every time you find yourself in a discussion around your new company, but that doesn’t mean you shouldn’t be prepared to answer them. Some of these may seem obvious – and some might seem a little less likely to hear than others – but better to be over-prepared when starting a new venture.

1. What do you do?

This is not intended to be facetious. When you answer by saying, “I work for a startup,” people won’t care. Speak with assertion: say the name of your startup as if it is presumed everyone knows exactly what it is. When they (almost certainly) ask what company you are referring to, then you can go into more detail. But open with confidence and you’ll be significantly more memorable.

2. What does your startup do?

This is a little different than the first question. In this case, people want to know about the operations. Going into significant detail and explaining what you do with an example is a sign that you’re unprepared.

Q: “What do you do?”

A: “We operate a SaaS platform that allows enterprises of more than ten thousand employees to run seamless, interdepartmental calendars for facilitated project management.”

Q: “Cool! Thanks!”

3. What demos are you going after?

From a marketing standpoint, this is a must. Building a generic archetype, or answering this question by telling people that you are going after ‘everyone’ simply isn’t going to work. Maybe, if all goes well, you’re product or service will one day appeal to ‘everyone’, but you need to start with a very specific user in mind. And, again, not just a broad archetype, but rather a specific individual and work your way out from there.

4. How much have you raised so far?

This is a question that is likely to come up when you’re talking to other startups (looking to pry) or VCs, and it is one that you need to have a definitive answer. It doesn’t look good if you can’t tell (certain) people specifics about your financials.

5. What’s your exit?

An ‘exit’ in the startup world does not necessarily mean the same thing as we inherently think it does. Essentially, when someone asks you about your exit, you need to be able to essentially tell them how an investor will (eventually) make their money back. For a lot of startups in the tech world, the value is in the active audience base. That’s nice for a while, but eventually those investing millions will want to know how they will earn a return.

6. What are you planning on adding to it?

As we’ve seen with plenty of exciting startups (again, particularly those in tech) people always want more. For a lot of users/customers, there is a lot of positivity in an initial reaction, but eventually something else comes along that pulls the attention of the user base elsewhere. You need to know what will come next and think much further ahead than what you simply have right now (assuming what you have right now is working well).

7. Where do you see the product/service in 5/10 years?

This is a question that is in line with the exit strategy. What exactly is your product or service going to look like to the public in five to ten years? Ideally, you will have expanded and will be appealing to new demographics. How will that expansion have come about, and who would you like those new demographics to be? Vision is an important quality in any entrepreneur.

 8. What are your roles?

When it comes to smaller teams in the startup world, it can sometimes seem like everyone does a little bit of everything. And, in most cases, that is true. But when someone comes along and asks the question, you better have a clear answer. Running a lean startup is important, and everyone involved should have a clearly defined role and be executing that role to the best of their abilities (along with everything else that they do).

If you can answer these questions, you’re in a pretty good spot! Keep it up!

Uber: Perfect Examples of What Not to Do

Uber: Perfect Examples of What Not to Do

They say that those that can’t do teach. Well, those that execute marketing and, more specifically PR for Uber teach us what not to do.

Uber is facing new, serious backlash after a horrendous assault by an accused New Delhi Uber driver on a female passenger caused the Indian capital to ban the car service (and extending that ban to other taxi service apps shortly thereafter). This is a heavy blow to the company following a new $1.2 billion round of financing to help lead a massive expansion into South and Southeast Asia, as well as a whole host of developing countries.

Uber Marketing Mistakes

There are a lot of factors that led to this incident taking place. Some of those issues rest on the safety of taxi passengers offered by the Indian government, while others, some bigger ones, rest on the shoulders of Uber. There are certain measures that passengers assume have been taken by Uber in order to protect them from these kinds of instances. Some of those measures include thorough background and criminal checks, as well as verified phone numbers and addresses for the drivers. Sadly, this was not the case in this instance in New Delhi.

Before we go any further, I would like to just make it clear that this article is not focused on the New Delhi attack itself, but rather on the response from the Uber team as well as their history of poor crisis management. Really, the questions I have relate more to the handling of marketing and PR for the brand than the specific instance itself. I would also like to note that I am a fan of Uber as a product, and I have been using it since it was first launched. I just think there are some major issues at the top of the company that need fixing in order to ensure the longevity and survival of the brand.

Uber’s Response

Shortly following the attack, the official statement from Uber’s CEO, Travis Kalanick, was posted on the Uber blog. In an example of some of the most poorly selected rhetoric for a brand crisis in recent memory, Uber embarrassed itself further. While much of the verbiage sympathizes with the victim and promises to work with authorities to ‘make New Delhi a safer city for women’, there is one bit in particular that sounds a little off:

We will work with the government to establish clear background checks currently absent in their commercial transportation licensing programs.

Now, I don’t know what your thoughts are on this, but it sounds an awful lot like blame deflection to me. Though it is clearly stated on Uber’s safety page that they conduct ‘background checks you can trust’, the driver in this instance in New Delhi has had plenty of trouble just like this in the past.

So, with all this information readily available, why does Uber decide to phrase their response in this way?

This Isn’t the First Time

As recently as a few weeks before this incident, Uber came under severe scrutiny for their proposed million-dollar journalist smear campaign. Emil Michael, SVP Business for Uber and the supposed ‘face’ of the company, decided to share his plan at a luncheon that was supposed to be off-the-record. Though they forgot to tell one of the attendees.

Again, the rhetoric of the apology was sympathetic and superficially genuine. But the real message was the fact that Emil Michael remained in his position, continuing his day-to-day operations while the world questioned the security of their data with Uber.

Uber had invested quite a bit in Michael, so one can understand why they wouldn’t simply want to sack him an move on. But to refer to his comments as reprehensible and do simply nothing about says quite a bit more. Any half decent PR executive will tell you that in order to save face, quite a bit more than a brief blog post will be needed. That never happened.

When issues with drivers arose in San Francisco and Los Angeles, the former of the two being an accident resulting in the death of a young girl, was there anything more than a blog post and a differing of responsibility? Again, no. Granted, after the severe backlash of the San Francisco ordeal and the accompanying lawsuit, Uber revised their insurance policy. But that shouldn’t have been prompted from severe repercussions, it should have been a first instinct. And again, I ask, who was responsible for calling the shots? Certainly not a PR executive with half a mind to understand the consumer.

Change and Adapt

As I mentioned above, I think Uber is a fantastic product. I think the transportation industry is being radically changed (or, disrupted, if you prefer) as a result. In fact, when I was speaking at a conference in Kuwait I mentioned my affinity for the app. But in order for the brand to survive, it needs to make some serious changes at the top.

Much like Blackberry (at the time, RIM) fell to the competition thinking that its market share could never be overtaken, Uber is seemingly blinded by its own vanity at the moment. Though it might think otherwise, alternatives (like Lyft) exist and others will enter the market.

For Uber to survive, it will take more than offering a holiday promotion to encourage office parties to use the service for employees. And one of those crucial keys to survival is going to be a PR team that can not only position the brand in a friendlier light, but one that understand what a crisis is, and how it should be dealt with. The fact that one clearly is not there yet is pretty shocking, to say the least.

Two Questions Every Startup Needs to Answer

Two Questions Every Startup Needs to Answer

These questions need to be answered if you plan on succeeding with your startup.

When it comes to launching a startup, there is a whole list of questions that need to be answered. As the CMO of two startups, I know what that list can look like: What are your five-year projections? What is your exit strategy? How about your deployment strategy? What are your costs? Is your model scalable?

Startup questions that need to be answered

These are all valid startup questions, and most teams have thought of the answers to all of them by the time they get to the point that they need to pitch to investors for Round A funding. (Or, in some cases, even seed funding.) But there are two questions that aren’t up there, and they are likely the two most important questions every startup needs to have answers for: What market problem is your product or service solving? And why is this product, and why are you the right person to solve it?

What market problem is your product or service solving?

This is the most important question you will ever ask yourself when launching a startup. You’ll often to hear to products or services referred to as solutions. That’s not just a fancy buzzword, it’s the defining characteristic. These are solutions, and you need to ask yourself what this venture will solve.

A lot of investors are wary of investing in hype products. And those that do will not invest all that much, if for no other reason than to see where an amusing product might go. Ultimately, these products fail or disappear.

Another important thing to consider is that your product needs to be viable in the future. It shouldn’t pigeonhole itself into a market that is over-saturated with indistinguishable products. It should be solving a larger scale market problem with a niche focus on that problem. It’s a little perplexing: solve an overarching problem with a niche focus? But that’s the trend.

A little while back, I wrote an article about the future of startups being niche-oriented. Simplicity is key, but purpose is even more important. Why will your product or service matter in a week, a month, a year or a decade? What is you plan in a decade from now and why will you still be relevant? That’s the first set of questions you need to answer.

Why is this the right product, and why are you the right person to solve this problem?

What makes you special? Again, ask yourself why in a decade your solution will still be relevant (or will have solved the problem entirely). This is always a hard question to answer. It is for that reason that it requires so much planning.

You never want to sound too self-preaching. It’s a turn off to a lot of people. That said, being overly modest leaves an equally bad taste. You want to assert that your product is the perfect solution for the problem you are trying to solve, but you want to do it by carefully outlining the whys, and not simply stating that it is without any clear, thoughtful justification.

Conclusion

Your justification for developing a product or service needs to be carefully thought out. The model of ‘It’s This for That’ is dying out. The startup world is becoming dangerously over-saturated, and those companies that rely on the identities of others to be relevant aren’t long for this world.

Know your market before jumping in with both feet. Identify where the market has its greatest pain points and figure out how your product solves these. This needs to be the framing of any pitch. Positioning yourself in this way, and recognizing how your can better your target market is how your startup will mature and survive.

Welcome to the World of Simple Apps

Welcome to the World of Simple Apps

Simple apps have exploded since the booming success of Snapchat, and there is no sign of the trend slowing down.

When working in a startup, one of the most important things to determine is your minimum viable product (MVP). In other words, what is the minimum you’ll need to produce in order to start getting a feel for your target audience’s interest. From there you can begin making changes, adding features and upgrading your system in order to cater to broader demographics (becoming the next Facebook).

As I watch apps flood the App Store and Google Play every day, it is clear that the common trend is simplicity when it comes to app stardom.

People are starting to move away from complex, big picture apps and moving – quite aggressively, I might add – towards simple apps. And when I say simple, I mean simple. These apps have one basic functionality, and that’s it. This is a concept that was popularized (and economically justified) by Snapchat. One primary feature that was, for lack of a better term, dumb-proof. Anyone with a phone and a finger could figure it out. The huge success and mountains of money poured into it led to this trend quickly turning into a whirlwind, which brings us to Mobli.

The Story of ‘Yo’

Mobli – a visual media tech startup founded by Moshe Hogeg in Tel Aviv in 2010 – has done a lot (and raised a lot of money) in the world of visual search, and rich media. To date, they have raised over $85 million, including a $60M+ Round C in November of 2013 from investors including Lance Armstrong and telecommunications giant Carlos Slim. Now, when a company has built enough credibility to pull in that kind of cash from those kinds of investors, why are we talking about them in this setting?

Yo and the world of simple apps

Yo.

On April 1 – or, rather, April Fool’s Day – Yo., an app developed by Or Arbel was launched on the App Store and Google Play. The app takes simplicity to a whole new level. Using Yo., you can send the word ‘yo’ to anyone, and they can send it back. The end.

“The simplest & most efficient communication tool in the world.

Yo is a single-tap zero character communication tool. 
Yo is everything and anything, it all depends on you, the recipient and the time of the Yo.

Wanna say “good morning”? just Yo.
Wanna say “Baby I’m thinking about you”? – Yo.
“I’ve finished my meeting, come by my office” – Yo.
“Are you up?” – Yo.
The possibilities are endless.

We don’t want your email, Facebook, there is no search, no nothing. just Yo.

Open the app, tap Yo, that’s it.

It’s that simple. Yo.”

That is the description from the App Store.

Originally, Hogeg had asked Arbel to create an app that made getting in touch with his wife or assistant one click away. Eight hours after he started, the app was complete. Once it was launched, the app took off, and it wasn’t before a team of investors, led by Hogeg, put $1M into the product. Now, the guys behind Yo. are coming out with an app that, allegedly, makes Snapchat look complicated.

Making Simple Simpler

There are no shortage of simple photo and video messaging apps out there. There is Snapchat, TapTalk, Facebook’s Slingshot, to name a few. And now, from the folks that brought us Yo., we have Mirage. Mirage’s unique selling proposition (USP) is in its simplification of the sharing process.

Mirage is a new photo sharing app from the makers of Yo.

Mirage

Whereas users on Snapchat are ‘burdened’ by the need to go from screen to screen in order to take a picture, then select contacts, Mirage houses everything in one place. What’s more (and this actually is a nice feature) users are not pressured to download the app in order to use it. If I should send a friend a photo message on Mirage, and they do not yet have the app, they will be able to click a link and view the message on Mirage’s mobile website. It then disappears and they can decide whether or not to download the app.

Competition now is not about who can provide the most robust, overarching platform, but rather who can make simple even simpler by aggregating features and removing steps.

A little while back, I wrote a case study on how Burt’s Bees created a fairly innovative eCommerce structure whereby users would click on a link in a Facebook product ad, and they would arrive at a cart, complete with the product, ready to checkout. This helped the brand increase online sales significantly, and it was for one major reason: they nixed steps involved in the sales process.

If you can turn your online store into a world of impulse purchases by removing the steps where people can rethink their decisions, you are all but guaranteed to see a significant spike in your sales. The same holds true for the world of apps.

Conclusion

If you can make communication one tap away, people will flock to your product. There is a reason why people are far more likely to engage with videos or photos than they are to read an article. The same holds true for listening to podcasts over reading a white paper. Simple is good for business.

Think back to iPhone’s meteoric rise several years ago. Apple’s marketing strategy had a common theme: simplicity. A hand would appear on a white screen and show how the entire world was, literally, at your fingertip. We all know how that worked out for Apple and iPhone.

When it comes to apps, we are moving towards niche rather than universal. I mentioned this as one of the lessons I learned in Amsterdam. Simplicity appeals to the masses. Now, a minimum viable product is, essentially, a one trick pony. But one trick ponies are a good thing in this case. Considering how much exists out there in the app market and how little attention people are willing to give these products, the easier it is to use your app, the more successful it will be.