Wednesday, January 7, 2009

Jamon Crockom and David Breshears of CrockomBreshears Talk about their New Startup

Jamon Crockom and David Breshears of CrockomBreshears Talk about their New Startup

What do you guys make?

We have a social networking platform with a few unique monetization components. Instead of relying on the existing advertising model of banner ads and ads words to generate revenue, we seamlessly weave consumer activity and interactive advertising into the user experience.
Much of social networking is about self-expression, learning about other people, and connecting with them based on shared interests. Lifestyle based social networks have begun popping up all over the web to address user demand for social networking to be more contextualized along these shared interests. Brands and products are integral to lifestyle. If I’m a parent I’m buying diapers and cribs and if I’m a golfer I’m buying golf clubs and shoes. Additionally, the products we buy are indexes of our identity. The fact that I drive a minivan and not a two-seater convertible is an indication of who I am. We’ve woven consumer activity into the user experience by making products a means of self-expression and social product recommendation for users, and word-of-mouth marketing for brands. It’s also a way for users to connect with one another by extending the concept of user profiles to include brands and products.

We designed the platform by first looking at where user demand was driving social networking, and found growing numbers of users migrating to sites that provided a more personalized, lifestyle-oriented social experience. Because a person’s identity is made up of a variety of lifestyle interests, they currently have to join a different niche social network catering to each of their lifestyle interests. The problem is that these sites exist in isolation from one another, and users are forced to create multiple profiles, maintain relationships across multiple networks, keep up with communication across multiple messaging systems, and deal with a variety of user experiences. So, the user experience is fragmented, and it’s a self-cannibalizing model – people just don’t have time to maintain 5 profiles, 5 networks of friends, 5 sets of photos, 5 blogs, and everything else. People are going to figure out the ones that work and that they’re most interested in and triage the rest.

So how does your platform address this problem?

We resolved the fragmented user experience problem by creating a platform that addresses niche lifestyle communities as parts of a whole. By joining one site, users have access to a variety of lifestyle communities. As a result, we offer users a single, unified online identity – one profile, one inbox, unified network management, personal expression, and communication tools, and a unified social experience.

What’s the challenge with niche social networking sites?

It’s hard to gain traction, to attract and retain users. Niche social networks generally lack brand recognition. Additionally, while advertisers are willing to pay a premium for the targeted nature of advertisements on niche social networks, they haven’t really figured out a way to effectively integrate advertising into the social environment. Banner ads and search based ads are incredibly unproductive on social sites. Although brands want to do interactive and social media advertising, this is very much a market in search of a solution. What is needed is something that integrates the brand into the community in a way that encourages user engagement. We can safely say that none of the social networking platforms we have seen have figured out a way to accomplish that goal. You can’t just bolt interactive advertisements onto a community and expect users to interact with them. When users view themselves as lifestyle consumers they actively seek out brands and products that reflect their interests, and that is really the key to successful brand integration.

So you sell it to companies that want to do social networking, and put it on their site?

We started down this path over two years ago building a niche social network from the ground up, and from that experience we learned some valuable lessons. As such, we’ve identified a target market that we think is ideally suited to leverage the advantages our platform offers – publishing companies. Publishing companies are increasingly moving onto the Web, and they have top tier, lifestyle-based content, recognizable brand names, extensive relationships with advertisers, and a broad base of existing users. With our platform, publishing companies can provide their users with seamless access to their entire content offering, unifying the user experience and massively increasing the value of this audience to advertisers.

This sounds like the next generation of advertising?

We are talking about a paradigm shift in advertising on the web. At the very time that every article that you read out there from every blogger and every analyst and everybody is saying advertising on the web is broken. Whoever comes up with the solution is going to make a lot of money. We just hope it’s us.

Best regards,
Hall T.

Monday, January 5, 2009

Nell Edgington of Social Velocity Talks about Socially Responsible Investing

Nell Edgington of Social Velocity Talks about Socially Responsible Investing

How did you come to Austin?
My husband and I were in graduate school in Dallas Chicago and we moved to Austin after that. Austin is the only place we wanted to live. We love it. We’ve been here for the past six years.

How did you get involved in this idea?

I’ve been working on this idea for about a year. I knew I wanted to start a business in this sector space and thought about a venture philanthropy fund. A VC fund except it makes investments into non-profits. I’ve been looking at various models in other cities. San Francisco and Boston have funds like these in which there is a social return although not a financial one. For Austin, I’m trying to build a fund to help non-profits grow and scale their business beyond incremental growth. We help them create that business plan and then pitch to investors for that growth capital. It’s a new idea in Austin to pitch for growth capital for a non-profit. We also help them diversify their revenue stream to earned income, sponsorship and more. This is an idea whose time has come and I believe it is timely for Austin. You probably know of several companies that have a social result.

What are some examples of companies in this area?

One example is Citizens Schools which is an after school program for middle school students. so Tthey bring people in who have special skills such as how to create a web site so teenagers find a connection to school. It’s proven to raise retention all the way through high school. The program works well on the national level but here in Austin they struggle because they are underfunded. We’re putting a plan together on what would growth look like. If you could grow this program through Austinto all the Austin middle schools that could benefit from it you would see a dramatic increase in retention rates in both middle and high school. Austin’s dropout rate is above the national average. It would take $300K to $500K growth capital for this program.

What are some examples of investment groups that do this?

Investors Circle in San Francisco which is similar to an angel network. They come together twice a year and review social and financial return opportunities. For example, they’ll invest in solar power companies or a company that recycles books with a portion of the revenues going to a non-profit. There are similar groups in Denver, Boston, LA, and New York. There’s a movement throughout the country in which investors seek a social return in addition to a financial return.

Any local company examples that have a social benefit in addition to a financial one?

Another example is Blue Avocado here in Austin which replaces plastic grocery bags with a reusable bag system which helps the environment.

Where can investors find out more about this?

I write a blog that focuses on this area.

Best regards,
Hall T.