Revolutionary Measures

Standing out from the Crowd (funding)

Turning your brilliant idea into a world-beating product requires a lot of things – drive, commitment, flexibility and often a large slice of luck. But one element it can’t really do without is money – whether to develop prototypes, employ staff or simply pay your own bills.

Finding funding has never been easy, but the range of potential sources does seem to be growing. As well as traditional sources such as VCs, banks, angels and friends and family, there are a range of government grants and multiple competitions that can potentially help startups take a step forward. I’m not saying this necessarily makes gaining investment easy, but it does give more options.The Pebble iOS Smartwatch

And another option that is expanding rapidly is crowdfundingsharing your idea with the world and getting them to back it before you start the expensive business of actually producing anything. If you don’t attract the pre-orders then it should probably act as a wake-up call – are you producing the right product that people actually want?

There’s been a run of successful, over-subscribed launches on sites like KickStarter. The company behind the Pebble smart watch raised over $10m and will start shipping real products this month. On a smaller scale, projects like photography book I Drink Lead Paint hit its target of £10,000, unleashing the thoughts and images of Mr Flibble onto the world. And B2B versions like Funding Circle have attracted government backing, making £20m available to British businesses over the next 12-24 months.

With growth like this, it is no wonder that Deloitte predicts that crowdfunding will double in 2013, raising £1.9 billion globally this year. Not huge in the scheme of overall investment, but potentially opening up funding options to smaller scale projects in a simple way.

But, with more and more projects out there looking for crowdfunding, how do entrepreneurs get people to view what they are doing – and potentially part with their cash? Kickstarter’s own stats show that just over 40% of projects hit their funding targets, showing it isn’t as simple as launching and waiting for the money to roll in.

This is where an enormous opportunity arises for the marketing and PR industries to get involved. Crowdfunding projects need marketing in the same way as any other product, identifying target audiences and demonstrating the benefits your new wonder widget brings to them. And then you’ve got to reach them, using both social and traditional media to identify the influencers that are likely to help you spread the word and convincing them and the world at large. Obviously the downside is that projects don’t tend to have any ready cash, but for anyone brave enough to go for payment by results the business is out there. At a time when the PR industry is suffering financially, creating smart, all-in-one services that help you get crowdfunding or launch your new iPhone app are just what it needs to be developing to recapture growth and build relationships with the next generation of smart businesses.

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January 23, 2013 Posted by | Cambridge, Marketing, PR, Startup | , , , , , , , , , , , | Leave a comment

Digital – is Don Draper worried?

Don Draper
Image via Wikipedia

As every marketing textbook will tell you there are five main promotional tools when it comes to reaching your customer – advertising, public relations, direct marketing, personal selling and sales promotion and all have distinct advantages (and pitfalls).

In the real world, outside the textbooks, a hierarchy has developed, certainly when it comes to big brands and their campaigns. Advertising is king, taking the largest share of budgets, driving the ideas and generally providing Mad Men-style glamour. PR has always been the poor relation, while direct mail and sales promotion have been relegated to the bottom of the list, seen as mechanical methods of distributing content. Salespeople rarely see themselves as a promotional tool so have headed off on their own outside marketing’s control.

As in many industries, the advent of the web disrupted this cosy status quo, but the model pretty much survived. Web and email were put into the direct marketing category and ad agencies continued to receive fat cheques for their work.

But there are now real signs that the world is changing – it isn’t a command and control model anymore. We’re not watching TV (or TV ads) as much (as a recent Deloitte report pointed out most people now have hard drive recorders) and new digital channels, like social media, are much more about conversations and content, not just slick one-way ideas. Adland is worried about losing control – bringing in PR people for their content skills, investing in swish digital agencies and generally reinventing themselves through new services. The question is – can they change fast enough or will savvy PR agencies step up to the mark? Time will tell, but if the PR industry fails to skill up it risks missing out on a once in a lifetime opportunity to lead integrated marketing campaigns.

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January 25, 2011 Posted by | Uncategorized | , , , , , , , , , | 3 Comments

UK needs to unblock the IPO bottleneck

Autonomy Corporation
Image via Wikipedia

There’s good and bad news from the latest Deloitte UK technology Mergers & Acquisitions survey.

On the plus side respondents believe the market is looking up, with increased optimism and higher prices paid for tech businesses.

But on the downside confidence in going public in 2011 has crashed – with only 16 per cent seeing increased investor appetite for tech IPOs. And more worryingly given the government’s plans to use the tech sector to kick start the economy, the acquisition market is still being driven by overseas companies. 90 per cent of those surveyed believe that the US will remain the dominant buyer of UK tech businesses.

Why should this start ringing alarm bells? Not through any desire for protectionism of UK companies – tech is one of the most truly global markets and nowhere is that more obvious than in M&A. The issue is that the stall in IPOs combined with the acquisition of breakthrough UK tech businesses risks reducing the number of UK leaders we need to encourage other companies and sectors. Large, quoted companies create their own ecosystem, building up a network of suppliers, spin-outs and related businesses that mutually interconnect. For example, look at the cluster of neural network/data mining companies around Cambridge. Headed by Autonomy, companies as diverse as Linguamatics, Transversal and True Knowledge all use broadly similar technology to solve completely different sets of business problems. They benefit from access to staff and suppliers that understand the market – take out the kingpin and it gets more fragmented, and consequently companies and people drift away.

So we need a way of encouraging IPOs that attract investors for the medium to long-term – perhaps that would be a better use for government cash than propping up the banks or the Irish economy?

 

 

 

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December 7, 2010 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment