November 20, 2008
Today, for the first time in its young history, SchoolPulse generated revenue!
The dollars are certainly small, but why not? We had designed in slots for banners, Google Adsense was incredibly easy to configure, and the ads relate well to the content they sit beside. That’s the brilliant thing about contextual advertising – it is unintrusive and, when done well, adds value to the user experience.
We’ll have to print this out, frame it, and hang it on the wall the way bars and pizzerias display their first dollar of sales revenue!
August 18, 2008
Today we fired up a brand-spanking new website after months of long days and late nights. I have been involved in several startups and am always amazed by how quickly business strategies evolve as the team deepens its understanding of what it’s going to take to solve an unmet need. SchoolPulse is light years ahead of where we were in April (a mere five months ago!) when we launched our beta site. If you are a parent with young kids, you should definitely check out the new site.
So what did this pre-funding, boot strapping internet company do to celebrate the launch? We ambled into the closest bar and had a few drinks before heading back to the office to man the support lines!
P.S. Can you figure out who is missing?
June 17, 2008
Well, I didn’t call it exactly, but I did post on my love for LinkedIn and I suspect others might have caught the bug as a result (-;
Nobody is going to be surprised that top shelf investors seized the opportunity to put some money to work inside LinkedIn, nor will they be surprised that LinkedIn, though profitable, is taking capital to further propel its growth.
What will certainly surprise the skeptics is the $1 billion valuation — at a time when the bloom seemed to be off the valuation rose for social networking sites. I saw someone quoted recently (on Techcrunch? Can’t remember) that Facebook is not worth the$240 million investment Microsoft made in Facebook. The 1.6% stake Microsoft bought valued Facebook at a cool $15 billion.
I have no trouble with the LinkedIn valuation because they are doing what comparatively few other sites are doing: Delivering real value to their audience. The value per member — approximately $44 assuming 23 million members — is not out of line with other deals we have seen in the social networking space. Forrester’s Charlene Li blogged on this in March, quoting the NewsCorp/MySpace deal in 2005 at $27.62/user and the AOL/Bebo sale earlier this year at $21.25/member. In my opinion, LinkedIn has two significant advantages that justify the premium valuation: A more attractive demographic and a value proposition that its members will pay for. Bain Capital must see that.
The audience is the source of value, and companies that can attract and engage the right audiences will find numerous ways to capitalize. It’s early days for social media monetization.
I said in my April post here that if LinkedIn “came to me tomorrow and said I have to pay to maintain the relationship, I’d do it in an instant.” The valuation set by Bain Capital and its supporting cast suggests there are a lot of others that share my enthusiasm!
May 27, 2008
Today I was talking to a venture capitalist named Elliot Katzman whose last gig as an entrepreneur in the 1990s involved launching MyTeam.com, a community site focused on little league baseball. They sold the company to the Active Network, a company that has rolled up several other sports-oriented sites, in 2001for an undisclosed price. It looks to have been a decent financial exit, though Elliott would say that they didn’t achieve their initial goal. His opinion: It is extraordinarily difficult to succeed in businesses that target education communities. “It’s a hit business” like movies or music — meaning you can have a great product but cannot control whether the public will love it.
I had a similar conversation with Jon Carson, currently CEO of cMarket and previously the founder of the Family Education Network. He has a similar story to tell — successful exit in a sale to Pearson Education, but failure to achieve the strategic vision on which the company was founded.
I’m beginning to get the sense that a number of experienced people are looking at what we are doing at SchoolPulse with a certain amount of skepticism. “Sure, it’s a noble idea, but do you really want to commit years of your life to making it happen? Is it a smart career investment?”
So here’s the question: Are we crazy? Elliot Katzman asked me why SchoolPulse will succeed when so many others have failed. I have three answers:
- We know the need personally. As an engaged father of four young kids, I experience the need for a product like SchoolPulse every day. Like everybody else’s kids, ours play sports and instruments, have play dates and birthday parties, juggle homework with screen time, and leave their parents with almost no time for themselves. It’s a wonderful, amazing, and chaotic circus but it’s a hell of a challenge to hold together.
- Our audience is primed. Concepts like web 2.0, social networking, and blogging did not exist when Elliott and Jon were starting their previous companies. According to Forrester, 53% of U.S. adults aged 27-50 are active users of social media. That’s over 53 million people! 92% of GenXers are using email and nearly 20% post to or maintain blogs. That wasn’t the case 10 years ago!
- The technology is easier and cheaper. I can’t quantify the decline in technology costs, but I can say that the cost of designing and building a really good social media site is a fraction of what it would have been 10 years ago now that almost every killer social media app is embedded in open source content management systems.
If you construct a map of the top 10 social sites, you will notice that they all draw their core audience from the GenY cohort. GenX is an opportunity ripe for the picking.
I’ll ask again: Are we crazy?
May 21, 2008
I was part of the team that launched Yandex in Russia in 2000. A number of the lessons we learned in Russia are guiding the development of SchoolPulse. Can we pull of another success on that scale?
In April we launched SchoolPulse v1.0 to build some buzz in local school communities and test some of our ideas for bringing parents online. Our boilerplate describes us as a social media company — which makes sense for a business audience — but it implies that we’re more about technology than people. What we really want to be is an indispensable resource for parents that they can access from a variety of platforms — email, the web, even mobile. The value needs to be immediate and the technology should be invisible.
On Monday we kicked off our strategy process to synthesize what we have heard from the 2,000+ people who have visited the site (we’re preparing to launch our v2.0 site as part of our national launch this fall). Beyond working technology – that’s the ante – what else will it take for us to succeed in this endeavor? I want to share the recipe we cooked up over the last 8 years at Yandex.
- Rising tide — A fast-growing market affords the opportunity to make some mistakes, which is inevitable.
- Smart team — The more smart people, the better, including the extended advisory board.
- Recognition that it’s not easy — It is never easy to create something amazing; as my mother always told me, “If it were easy to do, everybody would be doing it.”
- Indispensable product/service — You cannot be successful until your users become addicted to your service. At Forrester we called this “habituating usage.”
- Attractive and achievable business model — Ideas are great, but cash pays the bills. A strong monetization scheme is critical.
- Strong execution — If you can’t execute on the vision, go home.
- Runway to figure it out — Innovation doesn’t happen overnight, so be sure you have the cash to get to your vision.
I hope these nuggets will prove helpful to other entrepreneurs who are trying to figure out how to make their ideas real. Wouldn’t it be great if we can build another value creation engine like Yandex!