Filed under: Business Models, Companies to Watch, Recruiting
My friend Tim Hunt, a venture-backed entrepreneur whose company Lingotek is located at the Novell Open Source Incubator in Provo, called me the other day and said they have a new job opening for someone in internet marketing and sales.
I told him I would blog about the new position. His company has funding, a lot of momentum, and they are generating lots of buzz in the translation industry. Many leads are coming in every day. They have a powerful business model that takes advantage of the network effect. The last time I saw an exciting and innovative business model in Utah was Logoworks. I think Lingotek has a bright future.
Here is the job posting he sent me:
As I mentioned on the phone we are looking to hire a Director of Online Sales and Marketing. Here are some background points on the company and a description of the position.
Lingotek has created a new kind of translation technology called a Language Search Engine. It is basically a Google-like tool that runs in a web browser searching multilingual content. It differs from an internet search engine in two ways. First. it does meaning based searches instead of concordant searches like Google. If finds the same words with the same meaning in the same context in any language in the world. Second. it searches and indexes multilingual content stored on Lingotek servers from the community of translators around the world. It doesnJuly 26, 2006 by paulballen · 4 Comments
Filed under: Affiliate Marketing, Companies to Watch, Competitive Intelligence, Genealogy
I just got an email from Ancestry announcing new affiliate commission and better support for affiliates starting on August 1st. The new commissions include 5 tiers and get top affiliates up to 50% commissions. Plus, the call center now has a way to track phone calls and credit affiliates for generating the calls.
This is probably the best marketing move I have seen MyFamily.com make in the past few years. This should really motivate the top affiliates. Years ago, when I was running all the online marketing, our affiliate channel was our biggest channel and our lowest cost source of new customers. Rewarding affiliate partners with better commissions and credit for phone orders is a very good move.
Kudos to whomever championed this change in affiliate commissions!
(I hope some of the top Ancestry affiliates will comment on the changes…)
(Note: Although I founded MyFamily.com and Ancestry.com and initiated affiliate marketing there, I am currently not affiliated with MyFamily.com in any official role, and my opinions are simply private thoughts.)
While I’m blogging about MyFamily (for the first time in a long time), I might as well mention that I found it very interesting that the Seattle office is trying to hire Web 2.0 engineers for a long-overdue MyFamily site redesign. At a recent family reunion I fielded all kinds of complaints from relatives who are having problems with the current MyFamily.com site (which really hasn’t changed much in five years.) I get pretty excited when I think about what MyFamily.com could be doing with this property. It’s going to be exciting to watch. Seattle is also looking for a marketing director (for this property) that also has affiliate marketing experience. I tried to spearhead the launch of an affiliate program for MyFamily.com more than five years ago, but it never got a high priority from the company.
Here’s an excerpt from this Fast Company article showing how explosive the online video industry is:
With some 18 billion videos streamed online in 2005–up 50% from 2004–it’s not surprising that new businesses are sprouting up around this digital explosion. Each day on YouTube, more than 40 million video views are delivered and 35,000 new clips are uploaded. Google and Yahoo have video search sites and large caches of moving content. Apple’s iTunes Music Store sold 12 million video clips for $1.99 each over the span of just a few months. A new company out of Berkeley, California, called Dabble is vying to become a micro movie studio for the masses by inviting users to create, remix, browse, and organize video online. These aggregators are fast becoming the central nodes of an entirely new video marketing and distribution system, one far from Hollywood’s control.
Like Wayne Gretzy reportedly said, “I skate to where the puck is going, not to where it has been.”
If you want to have fun and make it big, start a company in a fast growth industry. Do something new, something innovative. Don’t just go copy some other business model that anyone else could do just as well. Be different. Be cutting edge.
At Provo Labs (an incubator), we try to invest in areas where there is significant growth. Starting a business in an explosive growth industry gives you a much better chance to get to profitability than if you are trying to compete with a lot of other players in a no-growth industry, where you are all fighting each other for the same customers.
But with online video, there will be billions spent in this space over the next few years, and a lot of new companies will succeed. Look at what has just happened in the last six months. YouTube’s Alexa chart is the best I have ever seen. It validates the online video space like nothing else.
In addition to renegade videos we will be launching some new technology and an innovative distribution model in the next 60 days.
The company is building a great management team. We are working with some great customers, and our revenues are growing each month. We are launching a major partnership with a well known online company in July. We have some new technology and distribution announcements coming soon as well.
We think we have a very cool and unique business concept. Nothing is unique on the internet for long, however, so we know we will be in a race with players large and small.
I launched 10x Marketing, a search engine marketing company, back in early 2002. We were pretty early in that space and the company has been fairly successful.
But our feeling is that 10Speed Media is catching this online video wave even earlier than 10x Marketing caught the search engine wave.
Hopefully 10Speed will end up 10x or 100x bigger than 10x Marketing.
(Don’t ask me why we keep starting companies that being with 10. Originally it was because in any alphabetical list, digits are ranked higher than letters. So 10x outranks just about any other company, including AAA Plumbing.) If you look in the yellow pages, most companies seem to start with an A. You always want to be listed first.
Well online, the numbers help a lot. Back in 1997, at Ancestry.com we were very happy when AGLL (American Genealogical Lending Library) changed its name to Heritage Quest. That gave us a slight advantage whenever people showed genealogy companies in an alphabetical list.
The advantage today is much smaller that it was a few years ago because a lot of directories are not alphabetical anymore, they are sorted by something else. Like Google’s directory is sorted by Page Rank. (See this example from Google’s Directory of Online Broadcast Video Shows.) Other directories are sorted by popularity. So this 10x strategy really isn’t a big deal anymore. (And the branding is getting confusing!)June 30, 2006 by paulballen · 1 Comment
Filed under: Companies to Watch, Competitive Intelligence, IPO Watch, Photo Sharing
A few highlights from the Shutterfly S-1:
- $83.9 million in revenue last year with net income of $28.9 million (But $24 million was from a one-time tax benefit recognized in Q4 2005. The revenue growth is strong year over year.
- They have stored more than 900 million customer photos in their archives.
- They have sold 300 million prints in 11 million customer orders.
- 84% of their customers are female.
This is a bit surprising to me.
- 98% of the revenue comes from the U.S. Even more surprising. Who is doing online print processing internationally?
- 4.1 million unique visitors in May 2006
Since I tend to focus on marketing strategies, here is the text from the S-1 about Marketing, Advertising and Promotion:
We use a variety of advertising, direct marketing technologies, channels, methods and strategic alliances to attract and retain our customers. These methods include direct marketing over the Internet, e-mail marketing to prospects and existing customers, search engine marketing, and traditional direct marketing mailings such as postcards and seasonal catalogs. In addition, because many of our products are either shared via the Internet or given as gifts, the appearance of our brand on the products and packaging provides ongoing distribution as well as viral advertising.
We place advertisements that cater to women and families on websites and in publications, contract for targeted e-mail marketing services and contract for advertising placement on leading search engines. We also maintain an affiliate program under which we pay program participants for referral sales generated from hyperlinks to our website from the affiliateJune 29, 2006 by paulballen · 2 Comments
Filed under: Companies to Watch, High Tech Stocks, IPO Watch, Utah Entrepreneurship, Web Analytics
I’m so happy for everyone associated with Omniture for successfully completing its IPO today. The shares opened at $6.50 and ended the day up slightly at $6.53 per share. Visit Yahoo Finance for more. This high tech IPO is a big deal for Utah, which needs more IPOs. And Omniture now has a war chest to help it maintain its leadership position in the web analytics space. This is a great company with a great product that many of my companies (and many of the really big online companies) rely on for real-time decision making, and for optimizing revenues.
Full Disclosure: I am a shareholder in Omniture. Do bloggers have to disclose that when blogging about a publicly traded company? Somebody tell me the rules …
While living in Silicon Valley in 1999-2000 and because MyFamily.com was in the photo-sharing space, I had the privilege of meeting with key people at most of the early photo-sharing sites. I remember one meeting in our Howard Street office with some folks from Shutterfly.com. Lots of companies wanted to partner with MyFamily.com because we had millions of photos (in private family websites) and they had ways of getting those photos into prints, calendars, mugs, and other products.)
Shutterfly had just launched. They didn’t really have a lot to talk about since they were brand new but I swear they used the name “Jim Clark” in our meeting at least a dozen times. (Not a bad strategy when your company founder/investor is the only person in history to have ever founded 3 companies that reached a $1 billion market cap.)
It’s interesting to fast forward to 2006. MyFamily.com is never even mentioned as a photo-sharing site, even though we probably one of the first sites to attract 10 million photos. (We did it by early 2001.)
Now Shutterfly is reportedly considering an IPO or potentially shopping for an acquisition deal in the $400-500 million range. Oh, how I wish MyFamily.com had stayed active in the photo sharing space!
If you want an interesting walk down internet memory lane, check out some of the site design changes at Shutterfly from 1999 to the present at archive.org. I well remember the 50 free prints offer for every new member. An expensive customer acquisition strategy (had to be funded by outside investment capital, of course.) But a very effective one. Today, the offer is 15 free prints for new members.
Note: I have not been involved with MyFamily.com as an employee since February 2002 or board member since December 2001. My blog simply contains personal opinions.
I wrote a Connect magazine article recently where I praised Josh Coates, a Silicon Valley entrepreneur who moved to Utah a couple of years ago to build an exciting company that offers free remote backup for any computer user. You can back up all of your most important files at no cost!
This is a no-brainer! Check it out. It’s especially nice for backing up your laptop.
I am an advisor to Josh’s company, Berkeley Data Systems, and a very happy Mozy.com user. Congratulations on the PC Magazine recognition, Josh!
I love the Freemium business model they are following: offer something valuable and free and then upgrade some percentage of your users to a premium version — in this case, a lot more remote storage space for a very low annual fee.
Here is the latest newsletter they sent out today:
Hello Mozy user!
So the big news this week is that PC Magazine gave us 4 stars and awarded us the Editors’ Choice award for our beta service! You can read more about the review here:
We appreciate PC Magazine for taking the time to do the review (authored by Neil J. Rubenking – who is one of the few reviewers that actually knows how to code) and of course, a special thanks to all our beta testers (that’s you!) for continuing to help us find and fix bugs in our system.
So Mozy isn’t perfect yet, but it’s pretty darn good, and getting better.
Mozy version 22.214.171.124 is out, with many improvements (including improved speed) and more bug fixes.
Download it here: http://mozy.com/downloads/mozy-1_6_1_6.exe
You can install it right over your current installation and your settings will be preserved. We strongly encourage you to upgrade – but a couple of upgrade notes:
- Norton firewall users – it’s likely that you will have reset your firewall settings for Mozy after an upgrade. (Norton isn’t the brightest of firewalls.)
- We’ve had reports of upgrades sometimes not actually upgrading all the way. If this happens, try manually downloading and installing the latest client over your current one. If that fails, check the support faq on how to get in there and clean your old mozy out to start again.
In other news, we’re growing fast! We’ve got over 40 million secure, encrypted files backed up for our users – and we’re having to add more servers to our data center. We’re also increasing the support staff as well. (Sorry about the delays in support emails everyone – don’t give up on us!)
So a lot of folks really love Mozy, and we frequently get inquiries about how they can help. Here are a few ways you can help us save the world:
* Give your friends an extra +256MB when they sign up with Mozy (oh, and you get an extra +256MB too!): http://mozy.com/account/refer
* Need even more storage? Mozy Premium is inexpensive at $19.95 per year (that’s only $1.67 per month!)
* If appropriate, write a review or comment about Mozy on a forum or mailing list. (Hey, genuine comments only – no astro-turfing allowed!)
As always, we appreciate your support.
-josh and the mozy team
Michael Robertson, founder of mp3.com, is launching a webservice called Ajaxwrite.com, which allows you to create documents in an online word processor and save them to your hard drive in Word format in the event that you need to share them with anyone who uses Microsoft Word.
In true Web 2.0 fashion, Robertson is rolling out a beta and adding new features every week for the next two months. His business model is yet to be defined. Robertson is a revolutionary. His mp3.com challenged the music industry’s fundamental business model. I heard him speak in Silicon Valley in 2000 and basically convince everyone in a skeptical audience that once you purchase music once, you should own it forever, and be able to move it from device to device and from format to format. He hated the fact that the music industry made so much money selling the same content to us multiple times (8-track, cassettes, records, CDs, mp3s) so we could listen on different devices.
His Linspire company (formerly Lindows) is trying to take on Microsoft Windows with a Linux based desktop. (I bought a $300 PC from Wal-Mart that had Lindows on it, and it didn’t do anything for me. I turned it on once and never looked at it again.) And now Ajaxwrite.com is trying to disrupt Microsoft Word and Office.
I glanced at it briefly this morning, and it doesn’t seem right yet. I know skeptics will say no one will want to use an online word processor. But, I will predict that sooner or later this approach (free online software in Ajax) will dramatically disrupt Microsoft’s software business. Microsoft will actually adopt this model as well, out of necessity. We’ll wake up one day a few years from now buying powerful $100 PCs and using free online software for most of our productivity applications. Most of our software will be subsidized by some kind of online advertising, like gmail is today.
The good news is that billions of consumers will have access to information and software that will empower them. The other good news is that software and information companies will have to add value by going up the application stack and doing new and innovative things. The bad news is that a lot of big software companies are going to suffer from this new approach and consumers will be confused for a while while new winners are chosen in the fast-moving marketplace.
Wasatch Digital IQ has a nice article about Utah’s deal flow in 2005. A great quote from Steve Grizelle about several Utah companies getting big and acquiring other companies.
I’m particularly impressed to learn that SkyWest is now the nation’s largest regional carrier with 2,400 daily flights and 14,000 employees. Here’s a very intesting fact: SkyWest has 380 aircraft compared to Southwest’s 441 aircraft. (Probably a major difference in the size of the aircraft, though, I’m guessing.)
Skywest’s market cap is now $1.6 billion compared to JetBlue’s $1.7 billion and Continental Airline’s $2.2 billion and Southwest’s $14 billion.
I’m also impressed with Headwaters, Inc. and Extra Space Storage, both of which have been growing through acquisitions.
Maybe Governor Huntsman is right. Utah is “the place” for economic growth in the next twenty years. We have the entrepreneurial zeal, the young, educated workforce, and maybe now we are growing enough large companies that we will have enough management talent (people who can manage billion dollar companies) to grow more of our companies into major players, rather than the traditional route of Utah companies being acquired by larger outside players. Maybe the tide is really turning.
Bill Nguyen is one of the smartest entrepreneurs I’ve ever met. (Ranks up there with Josh Kopelman.) I met him when MyFamily.com partnered with him in 1999 to provide his Onebox.com email/audio unified messaging service to our users. He is full of ideas and boundless energy.
His new music trading site sounds interesting. With $9 million in capital in addition to Bill’s ingenuity, this will be a site to watch.