Corporations are increasingly becoming omnipresent on social networks from Twitter to Facebook. As a result, a slew of startups are making it easier for companies to manage their social networking campaigns. One I like in particular is Spredfast. This is a completely web-based platform that allows companies to monitor, manage and measure their voice across MANY social media channels including Facebook, Twitter, LinkedIn, Youtube, etc.The company already boasts an impressive roster of customers like IBM, HP, AOL and Cisco.
Competitors
Spredfast competes in a space that is becoming rapidly saturated with players like Objective Marketer, CoTweet, HootSuite, Ping.fm and Involver. Technically, Spredfast (true to its name) has built integration with more platforms than any of these other services, giving it the most breadth. Spredfast also has a sleek interface and a medley of analytics to breakdown the performance of each campaign.
Acquisitions
The space for social media marketing had a bit of a stir last week when ExactTarget acquired CoTweet and is now building out a Social Media Lab. Expect to see this trend continue as web-based marketing campaign managers seek to extend their platforms to social media.
Canadian startup Tungle.me solves one of the most annoying business problems: scheduling. Scheduling meetings with those external to your organization (meaning you can’t just look on Outlook Exchange and see their availability like you can with colleagues) is a time suck. Not only do you have to go to your Calendar tab and look for available times, make time conversions and block off potential time blocks, but you also have to send out a meeting invitation once the time is set. Any assistant can tell you this takes up a significant part of his/her day.
Enter Tungle.me which streamlines and automates most of this process while syncing with Outlook, Gmail and now even LotusNotes (this is a tough one to maneuver)! While Tungle.me is currently a pre-revenue company, the feature set it offers is a compelling platform for additional services that businesses would pay for.
Tungle is addressable to a huge market and would most effectively reach enterprise customers as a plug-in or add-on to existing scheduling clients (i.e. Outlook). What comes to mind is an Outlook plug-in that launched at DEMO called Gwabbit.
Obvious buyers: Microsoft, Google, maybe even Salesforce.
With Google Voice to take calls and Tungle to schedule your meetings, the modern-day executive does not really need an assistant anymore.
Ex-Google Exec Sukhinder Singh Cassidy is now the CEO of 3-year old startup Polyvore, also based in Mountain View. Polyvore is a social shopping site that lets users assemble and display collections of items from clothing to furniture. The site collects both ad revenues and referral commissions to larger sites like Saks and Nordstrom.
The site has become fairly popular with the following metrics posted on its website as of Feb. 2010:
For a consumer and ad-centric business model, those are encouraging metrics given the average session length. The site also capitalizes on the trend that social media plugs us into: letting your friends serve as a filter for what’s relevant - in this case, fashion. It allows users to develop their own fashion magazines and circulate to the audiences amongst which they are the most influential (and more likely to garner a click to purchase).
Polyvore is a high-fashion magazine without the overhead. Because it’s content is easily shared online, it also has extremely low customer acquisition costs. The key to growing revenues will be expanding registrations and engagement. Polyvore could also expand its technology to the lucrative tween / teen model which is already active on social sites but also has high purchasing power (i.e. lucrative ad segment and strong click-through rates).
With a strong leader on board, we have yet to see what Polyvore will achieve. My own Polyvore creation:
Rent The Runway Raises $15 Million For The Netflix For Couture
Remember my post about how startups need to focus on building a niche and not jump around in their early stages? What I was speaking to was a specific instance at my former startup: a client wanted an on-premise deployment of our SaaS application. I was particularly shocked when our CEO wanted to move forward with this and re-develop a version of our software for this big brand name client who wanted to merely pilot our product. Beyond the fact that this wasn’t even a guaranteed revenue opportunity, I thought it was foolish to launch a new version of our still infant product within just 6 months of launch. A SaaS product is what it is. Customers wanting otherwise should not be part of the sales pipeline. The benefit of having 1 uniform product which is deployed to numerous clients and individuals all at once is especially more important to a new product which has not worked out all of its kinks. It also helps economize costs over a greater base of users, not just one client. I recently came across this deck from Bessemer Venture Partners which echoes the same advice (#7). 
Bessemer S Top 10 Rules For Being Saa Sy .
Introduced in late 2009, Rent the Runway (RTR) offers women everywhere the opportunity rent and wear designer dresses which may have previously been out of their budget or not suitable to repeat usage. The cost for rental ranges from $50-$200 for 4 nights.
The nascent company has already solved for common hurdles for the clothing rental business: they’ve partnered with a dry cleaners for reduced rates and each order comes with 2 sizes to avoid last minute fit issues. Think about it as Netflix for your night out.
What’s so hot about RTR?
- It’s a viral business. Like Gilt Groupe and RueLaLa, it’s an invite-only service which grows from word of mouth. This keeps marketing and customer acquisition costs down.
- Currently, there are no substitute products / services (though I anticipate this won’t be for long).
- It takes only about 4 rentals to break-even on a single dress. Let’s say RTR pays 70% of retail for a typical $300 dress which rents for $50. In about 4 rentals, they’ve recovered their inventory cost. The additional option that RTR has which it has not exercised yet is the sale of inventory. This would significantly boost their ROI on each inventory item and grow a new line of revenue.
And speaking of new lines of revenue, RTR can expand to accessories and other special occasion items.
What’s not so intriguing
- Mass retailers (Neiman Marcus, Saks, etc.) with lower inventory costs and deeply entrenched relationships with consumers can enter the market. The risks to these stores is that they could cannibalize some of their existing customer streams and may not even target RTR’s ideal customer (one who covets designer dresses but doesn’t want to shell out the cost for one). Mass retailers, if successful, could differentiate on both time and delivery speeds by leveraging existing warehouses and supply chain logistics.
- Regularity of business. Right now, RTR is positioning itself as your special occasion top. To date, about 10% of customers are returning. While it is still a fledgling business, the number of visits / customer / year is relatively low to other businesses with higher needs. Therefore, the key to success is a higher volume and range of customers.
- No unique differentiation. Led by a bunch of first-time entrepreneurs and no real differentiation point, RTR could be left hanging dry when new entrants come in unless they are able to build up enough first-timer experience to find ways to distinguish their service.
I last spoke about the Use of Funds that may have led to my (not my persay, but the one I worked at) recent startup’s death. Another cause I want to highlight:
Product Management
A product built in its infancy, particularly by a fledgling company, should be neatly trimmed and concise. It should focus on core functionality that is unique and offers an edge from larger players in the space. This is the key to building a successful, viable product which will become a valuable acquisition target.
Let’s take a look at some notable stars:
Google: Started off as a simple search engine and today has built a platform of various products
Facebook: Niche focus on ivy leage college students with the ability to add friends and poke…7 years later, it’s changed the social media landscape
The key is to start with some type of niche focus, even if your product is something that could extend itself to numerous segments - you must start somewhere to build momentum.
The more-defined and thought-out your product roadmap and guidelines, the more likely you can build a product that can survive. Many web-companies offer a beta testing of their products before a massive launch. While this may postpone revenue generation in some cases, this is a common strategy for fair reason - a new product will have bugs. You may have massively missed direction or made a cumbersome product. Hone in on what your customer wants and develop something that is truly differentiated. When your brand is unknown, your distribution channels are nonexistent and your marketing budget is nihil, an amazing product or service will garner the attention of evangelists who will spread the word about your product! Beta testing, furthermore, can often increase excitement about the public release of your product. This in itself can be a marketing ploy.
Trying to develop a full fledged application without any customer or usage experience is a trap that most startups are not capable of handling. Smart small and grow big.
The startup I was most recently working at just went bust. Along with it’s passing, I find myself trying to pinpoint the key reasons for failure. The first and most obvious reason:
Use of Funds
With limited access to capital, a startup must make judicious decisions with money. Every penny should be spent with caution. For a Web early-stage startup, the bulk of expense is likely development-related. And startups with out-of-house developers must proceed with extra caution as their development relationships may be contracted on a basis of time, meaning the work they give to developers must be well-planned.
What specifically went wrong at my former employer’s startup? Funds were spent on activities that did not have a near-term return. Such as travel to tech conferences even when the company was still in stealth mode. If you can’t discuss your product, having a tech audience is not valuable. While administrative assistants add significant value to an executive’s life, an early stage company with limited funding should forego such a luxury. This reiterates my point - find the most productive (return-bearing) use of each dollar.
It doesn’t matter if your a massively venture-funded company like Twitter or a small angel-funded shop, dollars matter. Liquidity is your ticket to survival and extends the life of your company, particularly in difficult times.
10-year VC Returns continue to slide
One of the key benefits of running a startup is flexibility. Unlike a huge corporate giant, a startup is agile with limited layers of authority to get approvals. The one major constraint that a startup does face is obviously access to capital. That in and of itself can be a huge hurdle to flexibility, but a startup can at least make more rapid decisions.
To me, this is one of the biggest advantages of working at a startup - no bureaucracy and a fast-paced environment where nothing gets stale. But from a tech investor’s perspective, I see it as a critical advantage which needs some governance.
Say you launch an early stage startup with a customer niche focus in mind (a niche large enough to target a broad enough market). You have some traction in this market and chug along. Suddenly, if customers outside of your niche show interest in your product, do you abandon your current segmentation and target this new niche? Things to keep in mind: how much will it cost to transition the product, how do you address new marketing, what is the profitability like for the new market, how will your infrastructure support a new segment? These fundamental questions aside, the key to startup success is to owning an initial market. Constantly adapting and trying to penetrate multiple markets at once is a recipe for disaster.
Startup CEOs and founders must carefully execute their strategy and stick to their convictions. Abandon ship only when it’s clear that you won’t make it out alive. 
