Putting the Pedal to the Metal at Amplify

For the first three months of this year, I have had the pleasure of breathing the same air as the crew from Amplify, the Venice based accelerator. As a member of NextSpace I have witnessed Amplify in operation and it is a shop that definitely believes in good rewards stemming from hard work.

As a fourteen-year veteran of the venture industry I have often heard the phrase, “value added investors”, which is usually touted by certain VC’s as their biggest differentiating quality. Typically this means occupying a seat on the board, using recruiters to retain senior management or hiring sharp legal counsel to structure complicated deals. The value that is being “added” is often at arms length or via a specialist who interacts with the entrepreneur. At Amplify I can truly say they take the value-add approach to another level by leading by example, demonstrating what hard work and dedication truly mean while exposing their founders to influential experts and industry change makers. Amplify’s portfolio companies are schooled on every challenge they need to master in order to achieve success. And they do all this in the span of four intense months.

Amplify Mentor Panel in full swing

Amplify’s close mentoring is by design. All the companies that graduate from the accelerator’s program work from the same office and can literally reach out and touch their investors at any time. That is not to say the Partners are breathing down their neck. Like good mentors Paul, Jeff, Richard, Oded and David as well as Chris and Kris create an atmosphere in which the motivated founders can take advantage of the knowledge base to which they are exposed. But like a Darwinian experiment, the extent to which these gifts are utilized remains entirely up to each individual entrepreneur. Every graduate of the Amplify syllabus will get out of it as much as they take the time to absorb.

Amplify Founders with Mayor Villaraigosa
(Left to Right) Jeff Solomon, The Mayor, Richard Wolpert, Paul Bricault, Oded Noy

The Amplify partners are dedicated to helping their entrepreneurs build the best companies possible and they throw themselves into it with great passion. Jeff Solomon and Chris Olson are often the last guys to turn out the lights and the first ones in the door on any given morning. In the brief time that I have co-worked with them I have been given advice by Ann Glenn the Director of Social Media Marketing at Sony Interactive, lunched with Eric Garcetti and hobnobbed with the attorneys from Greenberg Glusker who hosted me at their swank open bar event at the Staples Center where we watched the Clippers take on the Indiana Pacers. Mogreet explained the benefits of using pictures and videos in text messaging campaigns and late in March the entire co-working space was turned into a gallery with about fifteen different artist’s on display.

About two months ago I had the pleasure of sitting down with Jeff Solomon, along with my partner, Arturo Perez. We heard how Jeff transitioned from a start-up founder to an institutional investor when he helped found Amplify towards the end of 2011. Prior to launching the Accelerator, Jeff conceived and built Leads 360 in his spare time while running his software consultancy, ThinkLogic. Jeff told us of his life-long passion for technology and start-ups, which spoke volumes about the drive, dedication and focus needed to make any business a success.

Jeff Solomon holding court in the kitchen

Jeff looks for these same qualities in the companies he backs. For evidence of this you need go no further than Jason Xu, the founder of Battlefy. Building a standout destination site for video gamers takes moxie in the highly competitive and lucrative on-line game industry. Jason received interest from a number of accelerators from around the country and met with about half a dozen of them before choosing Amplify. Jason said he was attracted by the energy of the partners, which he thought best mirrored the passion and drive that he brings to work every day.

Jason laughed when he told me that he has rattled off inspirational emails to Paul Bricault, Amplify’s managing director, at 11:30 at night only to find an equally enthusiastic response in his in-box five minutes later. Jason said that the dedication and commitment of the Amplify team has been extremely inspiring throughout his time at the accelerator.

Paul Bricault Directing Traffic

If commitment and drive were Jason’s first attraction, the extensive Amplify network came in a close second. Every founder can directly access any investor or mentor in the Amplify army of cohorts, which adds up to more than 70 of the most influential business professionals in Los Angeles and beyond. The extensive list of Advisors, Mentors and Investors featured on the Amplify website is testament to the incredible number of doors that can be opened should you be lucky enough to receive a cash infusion from them.

Amplify provides seed stage capital to the tune of $50,000 to $150,000 in companies with a viable product that are demonstrating some degree of traction. Besides capable entrepreneurs who have a similar drive and passion that the partners extol, Jeff looks for businesses that can scale. This is of particular concern with eCommerce businesses that can jump out of the gates at great speed racing to $100,000 or even $500,000 in monthly sales, but struggle to continue the growth beyond those milestones. Consequently, Jeff is a big believer in B to B opportunities or SaaS platforms, like Jeff’s own Leads 360.

Unwinding at an Amplify party

From Kluge’s perspective, we can personally attest to the high quality of talent Amplify has backed. Whether it is the tremendous success of Amplify graduate 20 Jeans or the strategically positioned The Bouqs, every Amplify entrepreneur displays unwavering focus and enthusiasm.

Although the first draft of this post began when Kluge was a proud member of NextSpace; as of this writing we have moved to a bigger office to accommodate our expanding team. Now that we no longer commute to Windward Circle we cannot help but feel that Amplify has contributed to our growth as well. While we might not see Jeff, Paul and Chris as often as we once did, they have definitely become role models for Kluge as well.

Setting up for Eric Garcetti

As associate members of NextSpace we will continue to attend Amplify’s mentor series and happy hour and will gladly meet with any entrepreneurs that they support; should they need help in regards to branding, market entry penetration, digital strategy, responsive design, user experience or product development. Whether it is a thirty-minute conversation or a life long partnership we will always have time for any entrepreneurs who are putting their foot flat to the floor and are all fired up at Amplify.

Having Your Way without Having Your Say: How To Work with Rigid Clients

I had the pleasure of sitting down to dinner with two prominent architects who had built their firm from the ground up. Over a thirty year expanse they managed to transition from their garage to one of the most respected architects in the country.

As with many professionals from their industry, this firm had to learn how to work in teams of all shapes and sizes as well as a wide variety of clients: some of whom were hands off and extremely supportive, while others who were very opinionated and involved at various stages of a project’s evolution.

During the dinner the conversation the challenge of working with opinionated clients arose. It was noted that sometimes the client who has the strongest ideas on the aesthetic tone of a design can be the most troublesome.

“So what do you do in situations like that?” I asked curiously, recalling a recent Kluge prospect who was so bull headed we decided not to bring him on.

“I just nod my head a lot.” Was the quick response from the architect.

“You nod your head and then what happens?” I asked.

“I nod my head and then I get on with the job once they get distracted. Now don’t get me wrong, I love hearing opinions from my clients. It is great to have their participation. But often you find their attention waivers and you have to guard against those dogmatic clients who have bad taste. It is one thing to come up with the ideas, but the real challenge is in the execution. It takes talent to know when someone’s opinion is wrong and it takes experience to know how to deal with them. Obviously if they are signing the checks, you can’t tell them to jump on their neck. So I just nod a lot and then go about my own business once they get busy. ”

I was struck by the simplicity of the answer and calculated how many hours of debate and frustration could be saved by acknowledging opinions by the various steak holders but letting the underlying beauty and design objectives be the anchor. Unlike architects digital design agencies have the immediacy of an audience to guide a project, which is why incorporating a user experience strategy is so important.

Master Yu

The whole conversation reminded me of what my Tai Chi teacher used to say about the tree that does not bend being the one that is broken in the storm, which was a reference to Lao Tzu’s Tao Te Ching.

A man is born gentle and weak.

At his death he is hard and stiff.

Green plants are tender and filled with sap.

At their death they are withered and dry.

Therefore the stiff and unbending is the disciple of death.

The gentle and yielding is the disciple of life.

Thus an army without flexibility never wins a battle.

A tree that is unbending is easily broken.

The hard and strong will fall.

The soft and weak will overcome.

(Tao Te Ching, LXXVI)

Brian Callahan’s Mixers: Where Business is Always a Pleasure

Don’t try to find your own way if you’ve never been there before. Like a wayward prop plane sputtering through the fog as it makes its final approach at Santa Monica airport, you will need Brian Callahan’s careful guidance to steer you to the venue. And don’t be late. Hangar 8 is an event you want to arrive at on time. If you don’t you will miss out on the all important introductions that make Brian’s industry mixers such a success.

Brian Callahan the founder and CEO of a boutique investment bank, Markwood Capital Alliance has been hosting private dinners and industry mixers since 1995. But to hear him tell it, Brian was not always a natural at working the room. In fact, it was not until he began putting together his own informal gatherings at a hotel across the road from his office that he started to appreciate the benefits and life long bonds that can be formed when outgoing and giving individuals with similar industry backgrounds are gathered together in one room. Brian also realized he had a knack at making people feel welcomed, at ease and appreciated for who they are.

Hangar 8

Since that time Brian has hosted hundreds of gatherings and connected a similar number of professionals with ties to the digital media industry. The secret to a successful event, as far a as Brian is concerned, is bringing together people who have a good sense of humor and who are not afraid to laugh with you or at themselves and who share a common interest with their fellow guests and are themselves giving individuals.

Brian certainly embodies the generosity that he seeks out in others. As the host Brian’s biggest concern is that his friends and associate are totally at ease and enjoying themselves. It does not matter what you come dressed in, whether it is jeans and a T-Shirt or more formal attire, Brian could not care less. No money exchanges hands at Brian’s events, he pays for everything making sure the fantastic food and wine will flow as long as you have the capacity and time to consume it. Your job is to unwind and enjoy yourself.

Sarah Agor and Friends

The extent to which Brian puts you at ease was exemplified a number of years ago when a guest entered a parking lot through the exit and shredded all four of her tires. Without skipping a beat Brian ushered her into his soiree, called up a tow truck and had them replace all four tires so that his guest could go home without the worry of repairing her car. When pressing some cash on Brian to pay for his troubles, Brian explained they were a gift from Markwood Capital Alliance and wished her a safe drive home.

The Captain’s Room – House of Blues

Ambiance certainly plays an important role in setting the stage for a successful night. Progressing from the Double Tree Hotel, back in the mid 90’s, Brian’s events have been held in private dinning rooms on the upper west side of Manhattan, numerous Italian bistro’s on the west side of Los Angeles like Terroni and the Foundation and Captain’s room at the House of Blues on Sunset Strip. More recently, Hangar 8, home to the cutting edge, Subtractive has become the staple fixture for Brian’s soirees. Located on the north side of Santa Monica Airport Hangar 8 was literally once an airplane hangar. Stepping through a non-descript metal door you walk into a cavernous dimly lit room with a bar at one end and executive offices on the other with comfy brown leather couches occupying the center of the room. The space comfortably holds thirty to fifty people and Brian never seems to have trouble filling it, although he is always quick to express his gratitude to everyone who turns up as he understands there are always several events vying for anyone of his guest’s attention. And of course there is always L.A’s ever present highway headaches.

The Unflappable Clara Mayer

As a host, Brian is never alone. Typically, he marshals the support of Tony Rose and Clara Myer of Rose Snyder and Jacobs. Like Brian, Tony and Clara are extremely warm and gracious hosts and go out of their way to make you feel at home, even if they are meeting you for the first time.

Obviously, any successful social event will benefit from good wine and an ample supply of food and hand picked guests with a good sense of humor. However, what really makes Brian’s events resonate so well for all who attend is the manner in which Brian introduces his guests at the beginning of the evening. At about 45 minutes into the night Brian will stand up and welcome everyone in the room and acknowledge his co-hosts for their continued support and hospitality. He will then go around and personally introduce every guest and relate an amusing story or outstanding accomplishment or summarize their work or achievements. Brian does this without any notes and entirely off the cuff. By the time he has finished the room is aglow with good vibrations and a sense of excited anticipation. By extolling your own virtues Brian saves you the trouble of letting other people know what you do, and because you know everyone else’s “mini bio”, you can target particular individuals you’d like to know better. This introduction gives everyone a sense that they are privileged to be invited and helps them overcome the reluctance they might have when introducing themselves for the first time.

Arturo Perez helps himself to more food

Brian considers his mixers as “opportunities to bond rather than network.” He does not look to them as a means of closing a new deal, but rather as a way for being in the minds of people who he has or would like to do business with one day and who have a similar pay it forward approach to life.

Brian Callahan shies away from the spotlight when he can

Such an approach will not suite everybody. You have to have a long term vision and be willing to allocate a healthy budget, but I can attest for myself, Brian’s intimate gatherings are the best I have attended and I’m grateful for the opportunity he has given me to be included amongst his professional friends.

Henry Blodget Loves to Blog: The remaking of a disgraced Wall Street analyst

Henry Blodget, was once the darling of Wall Street covering Internet securities at Merrill Lynch’s and reporting on businesses such as Infospace, Internet Capital Group and Amazon. In 2002 Blodget’s salary was $12 million. He was the industry’s sound bite on all things tech until New York Attorney General, Eliot Spitzer singled him out as the poster boy for everything that was wrong with Wall Street. This was in direct response to the implosion of the tech bubble and the fall out of Enron, Worldcom and the questionable research produced by the investment banks in general and Blodget in particular. In 2003 Blodget struck a civil settlement deal with the SEC that cost him $4 million. Blodget also agreed never to work on the Street again.

Today Blodget is running one of the most successful financial online magazines, Business Insider. Blodget was hand picked by BI’s founder Kevin Ryan who was also the founder of Double Click.  BI has over 9 million readers and a good deal more than that if you include its international following. The site also has the backing of some prominent technology investors including Jeff Bezos the founder and CEO of Amazon, who just sunk $5 million into company and joins the likes of Mark Andreesen and Allen and Company as co-investors. The Bezos investment brings Blodget full circle as it was Blodget’s prediction that Amazon would be worth more than $400 a share back in 1998 that prompted Merrill Lynch to hire him as their Internet analyst, when Amazon’s stock shot up more than 128% a little over a month after Blodget made the prediction.

Recently Ken Auletta wrote an in-depth seven-page article in the New Yorker on Blodget pre-empting what some are surmising is a move back Wall Street.  Blodget’s story provides a great insight into the changing landscape of the three world’s that intersect at Blodget’s desk: financial analysis, on-line magazines and journalism.

The story of Blodget, as it was featured in the New Yorker, caught my attention as Blodget  first came into prominence around the time that I entered the venture industry. In fact, one of the companies that Blodget covered as an analyst, GoTo.com, was a Kline Hawkes’ investment and was sited by Spitzer as an example of the fraudulent collusion that existed between Merrill’s research analysts and its investment banking division. In 2001 GoTo.com the pioneer of paid search and the pay per click model was looking to raise more money in a secondary offering and was considering Merrill Lynch as one of the underwriters. Ultimately GoTo.com went with Credit Suisse First Boston, Salomon Smith Barney and U.S. Bancorp Piper Jaffray at which point Blodget switched his rating on the stock from a Buy to Neutral.  This sudden shift in opinion and others like it were deemed fraudulent by the SEC and ultimately cost Blodget his job. It didn’t however prevent GoTo.com from raising approximately $142 million in the offering.

Today Blodget is focused more on attracting eyeballs to his site than banking fees for a multi-billion dollar Wall Street firm. He bangs out about five posts a day and dispatches over 20 tweets from Business Insider’s thirteenth floor Park Avenue South office. Ken Auletta describes BI as being like the illegitimate offspring if Bloomberg and Fleshbot were ever to have a baby. To accommodate BI’s readership of mostly male, upwardly mobile readers the site promotes a tinge of raunch to it’s news stories along with coverage of the markets and insights into how to make money from the Internet. The stories are punchy and up to the minute taking advantage of the 24/7 news cycle, linking to other breaking news and churning the stories for BI’s own benefit in a in a fleshed out “re-tweet” fashion. Photos dominate throughout, attracting your eye to the next delicious tidbit.

The average reader is on the site for approximately four minutes. Given that the average reader can take in between 200 hundred to 250 words, that represents an 800 to 1000 word article or more likely a brief scan of a couple of articles that have caught your attention because of BI’s heavy use of photos. Blodget says that “the key difference” between judging companies on Wall Street and in journalism “is that, on Wall Street, I was viewed as a financial adviser.” Online, he said, he neither makes recommendations nor offers financial advice.”

Despite its popularity BI made a loss last year of $3 million and projects to generate approximately $11 million in revenues in 2012, or just one million dollars less than Blodget’s salary more than ten years ago, which just goes to show how difficult it is to make money as a journalist these days. BI board member, Gordon Crovitz noted in The New Yorker story, “We’ve gone from an era when people were afraid that journalism would disappear to an era when the question is: What are the new business models that will support it?” Which also suggest that BI is still searching for theirs or at least are trying to prove that their model can scale.

Auletta wraps up his piece with a Blodget Mea Culpa and a hint at what might be in store for the restless and some might say reckless stock promoter. “I love what I’m doing and I think it’s unlikely that I would ever work on Wall Street again, even if it were up to me.” Ten years ago “I got what amounted to a dishonorable discharge from the industry, and I’ve always been ashamed of that. At some point, if it seems appropriate, I would like to explore the possibility of being reinstated.” Certainly if Blodget could begin to benefit from his insider status and be paid for stock picking foresights it would bolster the fortunes of BI and its investors. As Steve Forbes once told me “You make more money providing financial advice than you do listening to it.”

Equity Compensation: A 6 Point Primer on Creative Service Fees

A willingness to accept equity as part of your agency or law firm’s fees can bring in more work that stimulates your team and exposes you to disruptive opportunities that are potentially very lucrative. However, there are a number of considerations to explore before agreeing to accepting equity as a portion of your firm’s payment. If you are considering a proposal from a wide-eyed entrepreneur who is looking to hire a design agency and is trying to preserve their cash here are six considerations to mull over before signing on for the job:

1. Who? Any service provider that is willing to bet the business they are working for is going to be worth considerably more in the future than it is today. Companies that take these creative fee structures are usually solo practitioners or companies with a limited number of partners who are amenable to accepting such compensation. Law firms or large accounting businesses with multiple partnerships often have difficulty parceling out the equity portion of these fees amongst its members. Investment banks on the other hand are keen to accept an “equity kicker” as an added incentive to make sure a deal “gets done”. Other service providers who accept equity as part of their service fee structure include web designers and developers, executive recruiters, business brokers and sometimes even caterers. Google’s famous 56^th employee, Chef Charlie Ayers joined Google in 1999 was paid 40,000 in Google stock as part of his compensation package. Charlie eventually sold those shares for $26 million when he left the business in 2005, which meant he earned $4.3 million for each year he worked at the start-up.

2. Valuation. If you are looking to work with a start-up it has to have an established value agreed upon by all parties. This valuation can be difficult to set if there have been no or little funds raised from say a “friends and family” round. If the valuation is set too high, the equity the service provider earns would not fairly compensate them for the work they provide. There are many service providers such as software developers who will not work for equity unless an investment has been made by an institutional fund. One way to avoid the valuation dilemma for start-ups is to structure the equity portion of the fee as if it is a bridge loan that can be priced at a discount to a formal round that can be made at a future date.

3. Dilution. The service provider must understand that the equity portion of their fee will be diluted as further rounds of capital are raised. As the company issues more shares for subsequent investors who back the start-up the portion of the service provider’s equity will diminish with each round of investment and further issuance of shares.

4. Liquidity. According to a report by Ernst & Young “Although VC-backed activity increased, (in 2010) the median time from initial VC financing to an IPO exit remains long. In the US, the median time to IPO exit in 1H 2010 reached 9.4 years, the longest span on record.” Given that an agency or development shop can begin work long before an institutional round is raised it can take a long time before a service provider will realize any liquidity on the equity portion of their fees. If the vendor has a cash flow issue themselves they might not want to take any equity at all given this time constraint.

5. Aligned incentives. Blended service fees are particularly good for service providers who expect to continue their relationship with a start-up for a long period of time. Since the equity portion of the fee can grow to be much more valuable than the cash paid out in the initial stages of the contract, the agency or lawyer is motivated to consider the long-term prospects of his or her client rather than focus on the immediate requirements of the project at hand.

6. Risk. Everyone likes a happy ending and the tech world is no different. We are all familiar with the stratospheric success of the likes of Mark Zuckerberg, Larry Page and Steve Jobs. The reality is that far more start-ups flame out or die a slow withering death while those entrepreneurs who “hit it out of the park” are few and far between. A quick glimpse at TechCrunch’s “Deadpool”  is testament to the enormous risks any entrepreneurs must face. At Kluge, we approach equity compensation as if we are stock investors. We only take on as much equity exposure as we are prepared to lose.

Entrepreneurs take enormous risk and dedicate years of highly focused effort in order for their vision to become a reality. Offering to shoulder some of that burden while exposing your company to the potential benefits of the rewards will show your early stage clients the degree to which you believe in their vision. These projects can be tremendously rewarding in regards to the creativity and challenges they offer. However, such speculative work should only make up a fraction of a service provider’s overall revenue base in order to minimize the impact should an entrepreneur’s vision fail to gain traction.

When Raising Venture Capital Look for an Emotional Tie to Seal the Deal

Experience has shown that a strong emotional tie to a deal will help more than any other factor when raising venture funding.

Entrepreneurs spend a lot of time and effort tracking performance, measuring sales traction and predicting growth in an effort to win over outside investors. However, it is the emotional bond an entrepreneur cultivates with their potential investor that helps close a deal.

Ask any venture firm or accelerator which investments get done in their shop and they will tell you the deals that come through their personal network. At Kline Hawkes & Co, the venture firm where I worked for 14 years, the “personal relationship” deals comprised approximately 90% of the entire portfolio. In fact, at most shops it is only the relationship deals that get properly vetted. This highlights how crucial it is for you to work your own network when approaching an investor.

Just because you do not personally know any of the partners at a fund does not prevent you from accessing their extended network. Most partners have enormous pools of advisors, mentors and friends anyone of which can make an introduction on your behalf.

A warm introduction will give you immediate credibility in the investor’s eyes but the entrepreneur will still have to work to forge a direct emotional tie. What forges this bond between the entrepreneur and investor can vary: typically, the connection will stem from something the investor and entrepreneur shares whether that be the same college or fraternity, a love of mountain climbing or surfing, children who attend the same school or ballet class or similar career paths. All these factors can be the catalyst that forges a deeper understanding and mutual respect between the two prospective parties.

I once had an investor call me in regards to a background check on a start-up he was looking to back. I was very familiar with the company having advised and worked as a consultant for the founder for a number of years. While the founder was extremely competent across a number of disciplines he had confided in me that he would like to identify a capable CEO who could take care of the day to day operations so that he could focus on building out his SaaS platform and manage his team of engineers. Having worked closely with the founder I was in total agreement and felt the sooner he could bring on a seasoned leader the better it would be for the entire business.

While not wanting to dampen the VC’s enthusiasm for investing in the start-up, I did suggest that some of the investment capital should be used to build out the management team and bring in a seasoned leader. The VC did not see the necessity of such a move. In fact he was keen to keep the founder in charge of the business. I found this a little odd until I remembered the VC was an engineer earlier in his career. The VC could picture himself running such a business some day in the future.

In this situation the bond between the VC and the founder was their career paths which became the catalyst for a speedy and successful investment. Eventually a CEO was brought in, but not until the founder began building out his next big idea.

When approaching investors it is important for an entrepreneur to make the effort to learn as much about the person sitting across the table from them as they can. An entrepreneur should not approach a pitch as though it is an interrogation. They will earn little credit by divulging everything about their company in as short a time as possible. This approach is likely to cause more harm than good and will make an entrepreneur come across as too eager and transparent to win the VC’s respect.

 

A founder should ask probing questions whenever possible and make reference to milestones or achievements in a VC’s careers. Knowledge about the investor’s family can go a long way as can an interest in the books they read and the hobbies they pursue. When making these references don’t be afraid to probe further to share and exchange stories about the things in life that you both are passionate about. The chances are, if you share their passions, you can convince them you have the right stuff to build a successful business, just like them.

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5 Common Misconceptions of Web Design: Insights from the Yoga Sutras

At City Yoga the other day our instructor, Anthony Benenati began the class by reciting the 5 Yoga Sutras known as Kleshas or stains that prevent students from achieving enlightenment.  The Kleshas, Anthony told the class, are: Ignorance, Ego, Attachment, Aversion and Fear of losing one’s sense of self.

When I heard the explanation of each Klesha it reminded me of the five biggest misconceptions prospective clients at Kluge have when it comes to their digital presence. They are as follows:

1. Avidya – Ignorance. Typically represented by individuals who have never had a website or had a website built over ten years ago by an intern who has since disappeared. A Google survey from July 2012 calculated that more than half the small businesses in the US are still without a basic website. http://siteswan.com/2012/07/31/percentage-of-small-businesses-without-a-website/ Often the Avidya client is reluctantly entering the digital realm, pushed by a friend or advisor to build or revamp their aging website. They do not know what they do not know which makes a meaningful conversation with a design agency very challenging. Their two biggest fears are cost and labor. It will cost them too much and will create more work for them once the site has been deployed. What they don’t realize is the benefits that can be realized even with a very basic digital strategy. The pride and effort they have placed in building up their business should be reflected through their web presence. More than a calling card a businesses website is how customers will discover, assess and interact with you and how you in turn, can engage your customers.

With over three billion local search queries in any given month on Google alone, no business can afford not to be on the web. And with 20% of traffic coming from smart phones your site has to be mobile friendly. A good website will work for you 24/7 and knows no geographic boundaries. If you are not flexing your digital muscle, your competition certainly is.

Baby steps and patience is required for these clients. Start out with very simple goals and reassure them that nobody has all the answers. There is nothing to be ashamed about being ignorant as we all must start somewhere. But don’t let it paralyze you. Fear can be overcome, in action is inexcusable.  Avidyas typically are extremely cautious and move very slowly. If you can understand the fundamental sales process of their business, explain how even meager increases in their sales process will make their efforts worthwhile you can begin to allay their fears.

2. Asmita – Ego This individual knows exactly what they want because their neighbor’s kid who aspires to be a graphic designer has laid it all out for them. They just need to know how much it is going to cost and how quickly you can get it done. Alternatively, the Asmita client has built the site themselves which now just needs a few minor touch ups, which often translates as the site is broken and full of structural flaws.

Asmita’s are challenging for a web designer; anyway you move you will be damned. Basically their site will need to be re-built from scratch. Hopefully there will be a few existing design elements that can be salvaged. A good way to maneuver this kind of client is to highlight the need to move to a “responsive” CMS platform, which will enable the site to adjust to any browser out there be it a mobile phone, tablet or desktop.

Unfortunately starting from scratch inherently means billing more hours than the “Asmita” client is typically willing to pay for, which places you in the predicament of working within their restricted budget and blinkered parameters. Nine times out of ten a good design agency should stick to their higher aesthetic standards and let the client seek help elsewhere if they insist on cutting corners and compromising their web presence for the sake of a couple of hundred dollars..

3. Raga – Attachment. The Raga client typically has a website that is a jumbled mess. They are big believers in the more the merrier and try to cram as much content on their home page as they possibly can. The Raga client views their site as if it were exclusive commercial real estate and they want to build as many structures on it as they can think of. This includes at least ten tabs that run across the top banner and about six forms begging for the browser’s attention.

The Raga client needs to be exposed to the school of simplicity championed by the likes of Steve Jobs’ who said, “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” And Leonardo Da Vinci’s, who stated “Simplicity is the ultimate sophistication.”

Often these Raga clients are well intentioned and very enthusiastic. If you can harness there energy and point them towards some sites whose performance improved the more they were stripped down, you are along way towards building a productive partnership.

4. Dvesha – Aversion. The Dvesha client is either a perfectionist who can never launch his site because he has just one more tweak to make before it is “totally perfect” or an obsessed worrywart who spend months studying the web looking at different sites and never coming to any concrete conclusions. Regardless the type, they both struggle mightily getting on to first base.

Once again, patience is in order. You have to win these client’s trust and show them examples of sites that have been conceived, mapped out and launched in a matter of weeks rather than years. A website and your digital strategy should be seen as continually evolving and having great fluidity. It is never going to be perfect and mistakes will be made, but everything can be improved upon and enhanced, PROVIDING, you get to launch. The worst thing you can do is sit on your hands and worry, because that is not going to help anybody.

5. Abhinivesha – self preservation or fear of death or losing one’s sense of self. This final Klesha is very fitting when explaining the need for denizens of the web to remove themselves and their preconceived ideas from their website and let their customers and digital community tell them what is right and what resonates. This is often one of the most challenging attitudes for novices to adopt as it means removing themselves from the center of their digital world and letting their network of friends, fans and followers tell them what is working. To adopt this approach you have to admit up front that you don’t have all the answers and you are willing to let outside influences steer your direction no matter how certain you are of your own convictions about your own company and your brand.

The clients who admit they “don’t know” what the results will be in regards to their digital project are the ones we relish working the most as we are of a similar mindset. It is only by letting your mobile app or platform or website see the light of day that you can begin to understand if it resonates with your clients and you can begin to tweak and adapt accordingly. And so by removing yourself and your assumptions of what you think is going to work you can more easily and quickly see what does work and by doing so start to become one with your digital realm.

In Yoga recognizing and coming to terms with each Klesha helps you to recognize and remove the next one until you become completely mindful of the present and at peace with the world around you free to calmly respond to whatever comes your way with no preconceived notions to guard and protect. The same can be said of your attitudes and assumptions towards the web. With master designers at your side you can take a deep breath, put your best foot forward, and step out into the digital realm – measure the results and adjust. Now how hard can that be?

Earned Media: What is it & how can it benefit or harm your brand?

Of the three horses in a brand’s marketing troika: owned, paid and earned – earned media is the least understood and least utilized, despite the fact that a conscious effort to leverage the channel can be extremely effective and long lasting.

Earned Media has evolved into a constant, real time stream of word of mouth thanks to Social Media

At Kluge we emphasize the importance of building out an overarching digital strategy so that all three media channels can be utilized. While the time and investment required to build these assets may seem extensive, the benefits they can reap are significant. However, they do require a constant vigil, particularly in regards to earned media.

In his blog, Sean Corcoran  describes the characteristics of earned media as having “evolved into the transparent and permanent word-of-mouth that is being created through social media.”

The virtues of earned media were recently highlighted at a panel hosted by Paul Bricault of Amplify and moderated by Ira Rubenstein, Executive VP of Media Marketing at Sony Pictures, as part of Amplify’s Mentor Series.

Amplify mentor panelist Ann Glenn, Director of Social Media Marketing at Sony Pictures Interactive, pointed to Nabisco’s response to the black out at the Super Bowl as an example of a well crafted “Earned Media” strategy.

Marketing 101 Panel Members Left to Right, Ira Rubenstein, Cherie Crane, Don Levy and Ann Glenn

Nabisco’s popular Oreo Cookie featured a humorous commercial during the regular broadcast of the Super Bowl. The ad depicted an out of control brawl in a public library between people who favor the cream battling those who favor the cookie. This argument is still being debated on Oreo’s website and social media outlets to this day, illustrating the careful cross channel strategy Oreo’s marketing agency, 360i had mapped out long before the Super Bowl commercial had aired.

360i’s foresight extended to its social media team the agency assembled to tweet while they were watching the Super Bowl. What football insights the Oreo team could offer might have been in question when the game commenced, but when the lights blacked out at the start of the third quarter, the light bulb went on for 360i crew.

“Power Out? No Problem….You can still dunk in the dark.”

Oreo’s Tweet generated during the Super Bowl Black-Out

The cheeky and real time message was re-tweeted over 14,000 times, and has kept the Oreo image ricocheting around the “Twitter Town Square” to this day. A 30 second “paid media” ad on the Super Bowl cost $3.8 million while the subsequent twilight tweet-fest cost Nabisco virtually nothing.

Regardless of how clever the tweet, nobody would be talking about it today if Oreo had not taken the time and effort to build up their followers on Twitter or taken into consideration the play between all their media channels when building out a campaign.

Earned media in today’s digital age can punish you just as quickly as it rewarded Nabisco, as the folks at Dominos Pizza can attest. In 2009, two rogue employees filmed themselves spitting on pies and sticking cheese up their nose before placing it on the doughy pizzas. They uploaded the distasteful scene on YouTube where over a million views were registered before it caught the attention of management 48 hours after the videos went live.

Dominos apologizes for distasteful YouTube clip 48 hours and one million views after the video was uploaded

The prevalence of social media and the 24/7 tweet cycle is only going to strengthen as the millennium unfolds, ushering in what will be the golden age of earned media and real time marketing. The social genie is well and truly out of the bottle and brands who ignore its impact will do so at their own peril. The brands who embrace the trend and encourage their fans to engage in an on-going dialog will strengthen the ties to their community and allow the conversation to continue ad infinitum 24/7, or so my friend, Ann Glenn tells me.