Recently I stumbled upon a new term that grabbed my attention – “Agile Marketing.”
It makes sense. Agile has been so successful, when executed properly, in software development, why not apply it to other business disciplines as well?
In fact, it seems perfect for me — a strategy and marketing guy by training who has long been enamored with and directly involved in the creative and technical domain of product development. Read more
In my consulting practice in working with software and Internet companies on strategy, product innovation and marketing issues, I often get approached by smaller, early-stage companies who, without a doubt, have needs for assistance. The rub for me professionally is that, because of where they are in their maturity (and funding) cycles, they often don’t have cash resources to hire “consultants” per se. In turn, I have made it SmokeJumper Strategy’s policy to not provide consulting services in exchange for equity. I have attempted this a couple of times in the past and it doesn’t work out. (I know the risk is I turn down equity in the next Google or Facebook, but I’m willing to live with the odds of that happening).
I do love working with early-stage companies and the entrepreneurs responsible for them – there is nothing more exciting, challenging and rewarding when you can see ideas come to fruition or changes in a product to better fit a market or insights about a market drive the direction and engineering efforts of a new product. This feeling is universal in all the spaces I’ve worked in: consumer, enterprise, education and developer tools. I’ve struggled with how to help entrepreneurs who I know and who have approached me to get involved at an earlier stage with regard to the fact I am a consultant and to a large extent am “coin operated” in delivering the services SmokeJumper Strategy provides and the fees that charged for their provision.
The clients I help with SEO, SEM and social media strategy often tell me that they imagine my website must be “super well optimized” for search engines. As embarrassing as it is to admit, I have to tell them, “No, it is not.”
The truth is that as a busy consultant and owner of several small independent businesses, I rarely get to focus on the online marketing efforts of my own web-based consultancy, SmokeJumper Strategy.
Therefore, much like the cobbler who is so busy making shoes for paying customers that his own children run around barefoot, my website runs around the Internet without any SEO-optimized shoes on at all!
Well, hopefully that will all change soon. Read more
Despite the myriad of investments, different business models and site types, very few companies have built viable businesses. A recent study of 80 “local” Internet companies, commissioned by MerchantCircle and conducted by SmokeJumper Strategy, a consulting firm based in Silicon Valley, identified five (5) myths of local Internet success.
#1. Build It and They Will Come
Many companies start with the idea of a founder or founders to build a better mousetrap. While the germ of an idea is a necessary start, it of itself is not enough to build a company. There are plenty of examples of companies building great features but generating relatively few unique visitors or page views: CityWaboo generates less than 5k page views monthly; OnlyBusiness.com attracts under 1k unique visitors per month; and SuggestLocal has so little user activity that it doesn’t register results on Compete. Even those who achieve relatively good traffic numbers aren’t destined for success: Edgeio was generating over 1.5M page views monthly when it decided to shut down; Insider Pages has over 1.8M unique visitors; and Judy’s Book still generates approximately 1.4M page views monthly (even after laying off the whole company).
#2. SEM = The Holy Grail of Traffic Generation
Many companies in local have experimented with Search Engine Marketing (SEM) as a way to drive traffic to their sites. When comparing overall page views against these companies’ search engine marketing budgets, it is clear that very few companies rely primarily on SEM for traffic generation. However, there are a handful of companies that are spending between $100k and $300k monthly on search advertising. For those companies that buy the vast majority of their website traffic (Done Right!, Outside.in and Ziffleads), the question is obvious – how sustainable are their business models? Are they able to monetize traffic at a rate that is higher than the costs incurred?
#3. Go Forth and Conquer the World
Blame it on the ambition of the big thinkers and dreamers of Silicon Valley and beyond, but many companies attempt to build a local brand nationally or even globally simultaneously. When you step back from this notion, one can see the flaw in the logic (or is it irony?) or at least the difficultly for a small start-up to accomplish this. (This myth is correlated to myth #1 “Build It and They Will Come”).
Companies such as SmallTown have fought the temptation to roll out nationally, rather starting with a focused geographic market. The result has been utility for users of the service, feedback for the company to continue to develop its tools, information and capabilities and credibility as they start to move into new markets.
There is risk, of course, in this approach. As others capture new markets they make it difficult for future entrants. Plus it may not appeal to the ego and financial desires of investors. But compare this to those who have attempted to build a site that works globally/nationally, such as CitizenBay (less than 1.5k unique visitors) or StreetAdvisor (less than 3.5k unique visitors), who have minimal traffic and little active membership. The result is “no there there” – the equivalent of throwing a really hip and cool party that no one attends.
#4. Advertising Will Pave the Road with Golden Bricks
While there is little debate that Google AdSense, Yahoo Publisher Network and other site advertising networks have enabled many small sites and bloggers to generate income from advertising on their sites, relying on advertising exclusively to build a viable business is very much in question. Our study found no local sites that are driving big revenue levels and growth rates with advertising only. For advertising to pay off, local players need significant traffic. Yet, many sites have failed to establish a revenue stream of any kind.
Sites with higher revenue levels rely on some combination of service licensing, commission or other revenue streams in addition to site advertising (display, sponsorships and pay-per-click). MerchantCircle is one example of a site that has been able to create multiple revenue streams: advertising (Citysearch, AdSense and directly-sold display ads) as well as member subscriptions.
#5. Bootstrapping: What is Old is Old Again
While some high traffic sites have had limited funding, all the low traffic sites share low funding levels (or no outside investment). So while getting your business well-funded is no guarantee of success, without funding it is very difficult to fuel the product development and marketing that is required to establish yourself and grow.
Without some funding event, many local companies are destined to continue to be niche or marginal players, will die on the vine or become acquisition fodder for others: EventShopper, Savory Cities, and Zixxo.
About the Study
The study was conducted by SmokeJumper Strategy, a Silicon Valley-based marketing and product consulting firm, and was commissioned by MerchantCircle. 80 companies were assessed using publicly available information from Alexa, Compete, Google, SpyFu and Xinureturns. For more information, contact SmokeJumper Strategy.