Its been a terrific year blogging about momentum. All good things, however, must come to an end. After 26 posts and thousands of visitors, I have decided to focus on my self-publishing efforts on the Momentum Index (www.momentumindex.com). There, we will track the 10,000 best companies in the venture ecosystem and tell you who is hot and who is not!
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All the best, Ben
As predicted, the long lost, but quasi-popular independent band icon Dispatch, has announced a reunion tour this summer, as I have written about before. The details of their tour can be found here www.dispatchmusic.com. What is noteworthy is that they are offering their fans a trade. If a fan posts information about their tour on Twitter, Facebook and send emails to five friends, then they get ALL of Dispatch’s recorded music for free. So, the music is like a printer .. a loss leader that the band uses to get something of value: new fans. Give away the printer; make money on the ink! The marginal cost of that download is close to zero. The economic value of a new fan is greater than zero. They are getting about 40 tweets an hour from this practice.
I think that over time, more bands will realize the value of giving away their digital music for free., and then focus on making money in other ways. Bands should find solace in the many freemium business models that have proven profitable and successful. In social gaming, for example, some huge percentage of revenue comes from a tiny number of people who just have to have that virtual unicorn.
I think we will see more and more focus on bands that create premium experiences that charge their most loyal customers since the most loyal and intense fans are more likely to depart with their money. They will find the musical equivalent of whales. Obviously, more fans equals more whales. For my favorite bands, I would pay real money for the following:
(1). Membership in a cool online community that gave me a sneak peak of new music, a chance to tell the band what I thought of it, and also a peak into their lives. Rhett Miller of the Old 97s does a free video diary that is really fun and interesting. Let us be part of the conversation. Make us a quasi-band member. As proof of the demand for this kind of thing, check out www.blazetrak.com, which enables celebs to monetize by allowing fans to have a quasi-direct connection.
(2). VIP experiences at shows. Bands should take back the ability to control VIP tickets and use those experiences to generate more revenue off their best customers. I can buy great seats in some venues, but I would pay a ton for a backstage pass, or getting to hang out with the band at a cocktail party after the show. From what I have seen, promoters use those experiences to benefit themselves more than the bands. The band should control these experiences and sell them directly.
(3). Special song versions: I would love to be able to do my own mixes of hits or add to the music of my favorite bands. Make this accessible to anyone, for a cost. See which of your fans can do the best mix or derivative piece. I should be able to license music simply and easily directly from the band, so long as I can’t market it as theirs. As a musician, I would pay for that.
(4). Schwag: Bands need to be more focused on products and make more than tee-shirts. Harness the power of the community to create collectibles and high value items that are sold direct. We need a Threadless just for band products.
A few off the top of my head. What else could they do?
Next time you want to do something good, just don’t do it. That should be Nike’s new slogan: Don’t Do it. Because you never know what chain of events you are going to unleash.
So, a bunch of crooks from Enron, Worldcom and Healthsouth thought that being a public company was a great thing. They made a gazillion dollars publishing crazy financial statements and getting the public to buy their stock. And then things went very badly and a few crooks ended up in jail.
Then some people in Washington thought that they would do something “good” and tell the Accounting Gods (otherwise known as FASB) to make it impossible for any crooks to cook the books of a public company forever. After all, we need to protect the small stockholders! So, the accounting gods then made it so difficult to produce a financial statement that showed a profit that companies had to wait longer and longer to go public. Then, FASB demanded “mark to market” accounting, which helped unleash the downward spiral of asset sales that led to the credit crisis. After all, we have to protect the stockholders by telling them at every minute how much illiquid and impossible to value assets would be worth if they were all sold right now. The credit crisis then wiped out the bulge bracket investment banks, which made it even harder to go public. While the regulators spent their time punishing anyone who wanted to be public by making compliance miserable, those same folks saw no problem with short sellers who manipulate news to trade off it, or the fact that high frequency traders made millions front running those same small stockholders.
And so now we simply have no small IPOs and the best companies will bend over backwards to avoid the outcome that used to be a company badge of honor — the public offering. Instead, the small stockholder is left on the outside while Goldman Sachs clients are able to buy Facebook stock, but they can’t, all because being a public company sucks so much that great companies would rather do these private deals than be public.
Congrats Washington! You have protected the small shareholder so well he has nothing to buy but index funds.
Evidently, turning jewelry into gold is the next gold rush. Cash4Gold.com is rumored to have generated $90M in its first year of operation. I guess it has some of the hallmarks of a great startup. First, the value proposition is simple to understand and easily communicated. Second, there is a large and, given our current economic malaise, a growing market. Third, celebrities can be used to great effect — especially Ed MacMahon and MC Hammer. Fourth, they have the perfect domain.
Okay, I have to go look around the house for some old jewelry to send them.
About a month ago, I was playing my standard Pandora Mix (which is made up of a bunch of Alt Indie trending towards ACL style Alt country) when I heard a song that sounded like the love child of the Greatful Dead and Sublime but with killer two and three part harmonies, and some hard hitting horns added on for good measure. It was jamming and I liked it instantly, cutting away from my due diligence to see find out who it was.
The band I discovered awew is called Dispatch, who I had heard of in a passing way, but didn’t know. I went to their website and Wikipedia and discovered a fascinating tale. It turns out that Dispatch has long been a trailblazer of the indie music scene, building a large and loyal following but refusing to ever sign a recording contract or pursue a label. Instead, the recorded and produced their own music and toured heavily for from the mid 1990′s until 2002, when tensions in the band caused a split. They threw one last show in Boston as a tribute to their fans, which turned out to be the largest independent concert in music history, pulling 110,000 fans into Hatch Shell. Over the years, they have done reunion shows for charity here and there but otherwise followed their own careers.
When I first checked out their well designed website, I was impressed with the use of social media, and noted that they gave away tons of free music. I sat there and listened all one rainy San Francisco day, which cemented my interest.
One day, however, I noted that the website had been replaced with a “Countdown” to some major announced. I checked their Facebook fan page and found that they were posting bar codes. I downloaded a bar code reader to my phone and read the bar code. It took me to a map of Berkeley, CA. Other bar codes came, each signifying a different city. Meanwhile, they now have 200,000 fans clamoring and begging them to come play in their town as each discussion thread gets hundreds of pleading, desperate comments. To provide context, Band of Horses — everyone’s independent darling — has 400,000 facebook fans. Elvis Costello has 170,000 or so. The bar code gambit has started a conversation and that conversation is reverberating at no cost through the network. The press has picked it up and you they are reclaiming all those fans. Every week I go back to see what new bar code is available for scanning!
Social media is a dream for a band like Dispatch. They can finally take their business international and create a direct connection to thousands of fans at no cost. Who needs record labels? Who cares that my local radio stations seem only to play Katy Perry and Pink now. Dispatch is coming back and thanks to Pandora, Android, and Facebook, I won’t be a complete dork and miss them this time.
I was doing some work today and came across Ironplanet, which is an Accel-backed marketplace for buying and selling construction equipment. The company filed an S-1 back in March and then an S-1/A in May, so I kind of assumed that they would be out by now.
I checked and it appears that nothing has happened on their IPO. On paper, the company seems like a strong candidate. Its eBay for a large market of expensive and specialized used equipment, a market which is old school and opaque, and thus vulnerable to the efficiencies brought by an internet-based middleman. With a marketplace business model, which I-bankers tend to love, it generated $54M and $5M of income from operations or so last year, showing healthy margins at moderate scale and strong revenue growth. At first blush, all looks good. I expected them to get a good reception from the public markets.
But then I read the S-1/A closer and it appears that that profit turned to a loss in Q1 2010, though the loss looks seasonal. Y/Y Q growth in Q1 looks strong, but it was accompanied by large increases in sales and marketing spend and G&A, which raises at least some question regarding how much hand holding these transactions require.
Since I look at lots of companies who are potential IPO candidates, I thought I should dig a bit farther.
I found this unbelievable rant by a very pissed off person in the TOP search return on “Ironplanet IPO date.” (Note to remember: the internet makes it damn easy for a pissed off person with information to read important eyeballs).
Check this out:
http://ironplanetipo.com/jpmorganchaseironplanetipoclusterfuck.htm
I don’t know if this rant is true, but clearly something is going on with this company. There are claims — acknowledged in the filing — that the company stole the founder’s stake by repurchasing his shares for $0.05 via the dreaded repurchase right a week before the company filed to go public. This could be a big story for the valley. Accel Partners and Kleiner Perkins are investors.
Techcrunch? Mashable? Venturebeat? Anyone home?
I have done some work on local and thought my readers would appreciate this list. Blame any mistakes on Crunchbase. Let me know if I should add a company.
| Company | Amount Raised | |
| Groupon | Groupon http://www.groupon.com features a daily deal on the best stuff to do see eat and buy in more than 150 cities around the world. By promising businesses a minimum number of customers Groupon can offer deals that arent available elsewhere.pGroupon brings buyers and sellers together in a fun and collaborative way that offers the consumer an unbeatable deal and businesses a large number of new customers. To date it has saved consumers more than 300 million and claims it | $172,800,000 |
| Yelp | Yelp also launched in the UK in January 2009. Users write and read reviews about anything from their favorite hole in the wall restaurant to the worst downtown club. Additionally Yelp offers social networking features the ability to add friends groups events talk in forums or message contacts. | $56,000,000 |
| MOLI | MOLI connects business store owners and like minded shoppers. Business owners can increase their list of customers increase their sales and open an easy to use affordable online store in minutes. Shoppers can receive promotional discounts as they shop for their favorite products and services. pMOLIs Business Resource Center is filled with valuable business and self development articles videos and podcasts.p | $55,600,000 |
| LivingSocial | LivingSocial is the social commerce leader behind LivingSocial Deals a group buying program that invites people and their friends to save up to 90 percent each day at their favorite restaurants spas sporting events hotels and other local attractions in major cities. LivingSocial has an extensive user base of more than 85 million and is headquartered in Washington D.C. To sign up for Deals in your city or to find out more information about LivingSocial visit http://www.livingsocial.com. You | $49,000,000 |
| WebVisible | Based in Southern California WebVisible is a Software as a Service SaaS company and leading name in local online advertising known for being a true expert in bringing the Internet as an advertising and customer acquisition medium to small businesses around the world.pThrough direct sales and global partners in the Yellow Pages newspaper and online marketing industries we offer our innovative online advertising products to small business customers.pOur advertising produ | $37,000,000 |
| Yodle | Yodle is a local advertising enabler giving businesses increased ability to reach their audience and measure their advertising efforts. Yodle operates a 3step process first Yodle provides tools to local advertisers to publish ads that will appear in relevant searches in major search engines like Google Yahoo MSN and SuperPages. Second Yodle drives these leads to your website if you dont have one set up you can contract with Yodle to create one of their custom adverSites. | $35,000,002 |
| Local Matters | Local Matters offers a suite of solutions for online publishers of local information which consistently help them achieve their business goals including traffic and revenue growth and a better return on investment. We provide online publishers such as directory publishers or online real estate listings with localized web site portals that successfully connect consumers to rich content. In addition we achieve broader exposure for clients advertisers and agents through syndicat | $35,000,000 |
| Become | Become is a search engine focused solely on shopping. Become offers various views and filtering criteria to allow users to more easily shop locally or all over the web. | $30,000,000 |
| Badoo | Badoo allows its users to meet new people and friends in and around their local area. It focuses on the forgotten area between social networks and dating websites where people just want to socialize with new people and have fun. The site avoids advertising and bases its business model on a set of premium features. | $30,000,000 |
| Yext | Yext is the Next Yellow Pages offering superior local services for advertisers publishers and users. Yext helps local businesses get found maximize yield for its publishing partners and answers local searches for internet users. Over 20000 businesses are connected to Yext Calls the local advertising service that gets businesses listed across the internet charges only for quality phone calls and lets them see real results. | $28,750,000 |
| BuyWithMe | BuyWithMe is the premiere group buying website where leading local merchants offer exclusive limited time offers to members of the BuyWithMe community. pThrough the power of its numbers BuyWithMe negotiates handpicked group discounts for its customers to access at spas restaurants health clubs bars and other local activities in their city. | $21,500,000 |
| DataSphere | DataSphere provides Web technology and an ad sales team focused on generating neighborhood level user engagement and monetization for existing media companies. | $20,805,381 |
| Where | Where Inc. is North Americas leading location based media company. With over 3 million active users the WHERE consumer application helps users discover save and share local places by putting the best local information at users fingertips and integrating money saving special offers from local merchants. | $18,500,000 |
| Meetup | a hrefhttpwww.meetup.com titleMeetup relnofollowMeetupa is a local community organizing network. Over 6.5 million people have created and joined longlasting local Meetup Groups around shared interests and purposes. | $18,300,000 |
| G5 Search Marketing | G5 Search Marketing is the leading provider of Local Marketing Solutions that help midmarket companies get found online generate more qualified leads convert more leads into new customers analyze marketing performance including offline and optimize to the marketing sources with the best return on investment. G5s Local Marketing Software Platform provides clients with more customers and better business performance. | $15,000,000 |
| LOC-AID Technologies | LOCAID simplifies and manages the complex challenge of locating over 300 million mobile devices for location based services LBS. LOCAID operates the worlds largest and most secure mobile location platform and allows mobile developers to locate their customers for enterprise authentication fraud management and hyperlocal marketing all through a single privacy protected API. | $14,865,973 |
| Roost | Roost is a San Francisco based technology company that helps local professionals get more business from social media. Roost was founded in 2007. Our flagship product is the Roost Social Media Toolkits. | $13,500,000 |
| Balihoo | Balihoo is the premier provider of Local Marketing Automation technology and services to franchises and national brands with local marketing needs. Balihoo brings enterpriseclass marketing to the local level and gives national brands full visibility into all local marketing activities and results. | $12,500,000 |
| Four Interactive | Four Interactive Private Limited provides online local information services. It offers information about business establishments events movies lifestyle wine and dine and shopping in Bangalore Mumbai DelhiNCR Chennai Kolkata Hyderabad Ahmedabad Goa Pune Mysore Jaipur and Coimbatore. Four Interactive Private Limited has a strategic partnership with Airtel. | $12,000,000 |
| V-Enable | VEnable pVEnable has over one million national regional and local advertisers looking for mobile audience. VEnable works with mobile search brands e.g. GoogleBing navigation apps Telenav Mapquest consumer apps Whitepages Poynt and carriers MetroPCS Alltel to acquire mobile audience relevant to a local advertiser. VEnable works with local advertisers to capture uniqueness of their business for a mobile consumerp | $10,850,000 |
| Judys Book | Judys Book is a search service for finding local and online coupons sales and deals. Its kind of like that wad of coupons your grandma carries around with her but way bigger and more resourceful and you can add reviews. | $10,500,000 |
| Geodelic Systems | Geodelic develops a free application for your mobile device which automatically browses your surroundings. Effortlessly swipe through locations to quickly find your preferred java joint closest bank or favorite restaurant. | $10,500,000 |
| Nixle | Nixle is a community information service that sends alert messages to the public via cellphone and email. | $10,000,000 |
| asklaila | asklaila.com, the Yelp of Bangalore India, is a reviews website consisting of user generated content | $10,000,000 |
| Center’d | Centerd is a local search and discovery site that organizes and distributes content based on SentimentAnalysis . Its unique approach to analyzing conversations about local places on the Web. By analyzing millions of conversations from multiple online sources Centerd is able to surface detailed insights about local businesses that give consumers a faster way to determine the tone of what people are saying about a place. Based on its contextual understanding of these conversations | $8,900,000 |
| JustDial | Just Dial an Indian local search destination. The company caters to over 25 million unique users and over 200 million searches in a year. Their search engine covers more than 200 cities in India. | $8,200,000 |
| OrangeSoda | OrangeSodas primary focus is on helping small and medium-sized companies succeed online by providing them with campaign management technology tracking reporting and optimization systems.pFounded by a group of Search Engine Marketers in 2006 OrangeSodas experience and knowledge come in part from building payperclick search engine in the late 1990s and early 2000s. | $7,500,000 |
| RepairPal | RepairPal offers a price estimator for car repairs a directory of local mechanics expert car advice and an online service record. The site offers detailed price estimates for 100 most common mechanical repairs giving consumers the information they need to pick a mechanic. It also gives quality mechanics and dealerships a source of qualified new customers. | $7,350,000 |
| MojoPages | MojoPages.com is a next generation local search solution which private labels its technology for media websites such as local newspapers TV and radio stations. The company’s solution includes a directory of over 15 million domestic merchants that are ranked based on their reviews and ratings so that the best businesses rise to the top of search results. | $5,000,000 |
| LikeList | LikeList is the simplest way to save share and find lists of businesses you can trust. LikeList was founded and is lead by several family guys whore passionate about easily connecting their families friends colleagues and communities with valuable and trusted local businesses. What Were All AboutLocal Trust. Knowing the person who refers you to a local business makes the recommendation more trustworthy. Simplicity. | $5,000,000 |
| ClickFuel | ClickFuel provides internet marketing solutions for small to medium sized businesses. Our team of experts and inhouse technology provides ppc seo tracking and analytics for anyone from your local mom and pop shop for national service provider. Leading ClickFuel is ex Monster Steve Pogorzelski who held the positions of EVPSales President of Monster North America and Group President International. | $5,000,000 |
| Milo | Milo.com is a free Web site that enables shoppers to research products online and buy local providing the best of both worlds. The leader in the local product search space Milo.com tracks the realtime availability and prices of more than 2 million products at over 48000 stores across the U.S. | $4,950,000 |
| Fwix | Fwix is a realtime local newswire delivering relevant news as it happens by bringing together local news blogs and citizen journalism. Founded in October 2008 Fwix offers the most advanced platform for finding optimizing categorizing and distributing local news across more than 175 markets in the US UK Canada Australia and New Zealand. | $2,750,000 |
| CityVoter | CityVoter helps local media companies and national brands develop best of competitions in cities across the U.S. The company uses social media and pointofsale viral marketing to ignite contests where businesses compete to be named the best. CityVoters best of programs have proven to drive significant engagement for leading media and consumer brands such as SF Chronicle Office Depot VH1 and NBCs Biggest Loser. | $2,600,000 |
| Fave Media | Fave is a better local search engine. Its goal is to deliver organized relevant results for any product or service you need without the clutter that accompanies results on major search engines. Fave allows users to enhance business listings with videos descriptions keywords and relevant contact info for free. | $1,600,000 |
| Yipit | Yipit aggregates and recommends local daily dealspYour citys top restaurants bars spas and shops are offering ridiculous deals on services like Groupon LivingSocial Scoop St BuyWithMe HomeRun and about 60 others. We organize all these deals then recommend the best ones based on your preferences. | $1,550,000 |
| ShopCity.com | ShopCity.com provides small independent businesses with a simple and costeffective online marketing platform that stimulates local economies by encouraging residents to shop locally. pShopCity offers timestarved local business owners all the tools they need to succeed online. pConsumers save time and money by purchasing gift certificates on the web shopping online and downloading coupons from their favorite mom amp pop shops. | $1,500,000 |
| PlacePop | PlacePop is a placebased social networking application developed by Ooga Labs a San Francisco-based consumer technology greenhouse. The company was founded in 2009 by Kent Lindstrom former CEO of the social networking website Friendster. PlacePop fills a gap in the geosocial networking market by providing a simple locationbased social app for consumers combined with a mobile webbased affinity marketing platform for local businesses. | $1,450,000 |
| PaperG | PaperG is an advertising technology company that automates local ad creation sales and management for online publishers enabling them to produce cost efficiencies and increase revenue. PaperG was founded in 2007 when Yale students teamed with Harvard students to reinvent the relationship between online publishers and local businesses. Looking at the most popular ways of exchanging local information PaperG innovated upon the concept of the community bulletin board to produce Flyer. | $1,100,000 |
| Needium | Social media Facebook Twitter etc. is now a massmarket. Millions of consumers are now sharing activities and opinions about local businesses. They are also expressing needs such as Im hungry My car just broke down and Does anyone have a dentist to recommend We call this the Needium the need medium. | $1,000,000 |
| BlockChalk | BlockChalk is an early stage locationbased service that helps people connect with their neighbors and mobilize their local communities. Using GPSenabled smartphones BlockChalk users can interact with people in their neighborhood to ask answer praise gripe report prevent borrow trade and much more. Its easy and free you dont even have to sign uppBlockChalk is currently on iPhone iPad and Palm as well as on Android via HTML5. | $1,000,000 |
| Brozengo | Brozengo is a local product search in France. Shoppers can browse Brozengo.com and search shops products coupons and compare. They browse and go in the shop to buy.Shoppers can create shopping list and print out coupons.Brozengo aims to generate traffic in offline shops. | $730,000 |
