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May 16, 2012 BY Mark Evans Posted in Social Media | 1 Comment

Wave Accounting Raises $12M

Simply put, Wave is on a roll.

The online accounting service unveiled a $12-million series B financing round that includes The Social+Capital Partnership, as well as existing investors Charles River Ventures and OMERS. The deal takes place only eight months after the Toronto-based company raised $5-million

In a blog post, Wave CEO Kirk Simpson said: “We’re very proud of what we’ve accomplished at Wave since we launched at the end of 2010. We’ve had nearly a quarter of a million small businesses sign up, with tens of thousands of new businesses joining every month. But our goals are even bigger than this. There are even more features in Wave Accounting and Wave Payroll that we plan on developing, as well as other complementary tools we intend to release.”

Wave’s rise is impressive given how quickly the service has been embraced and the number of users it has attracted. The company was one of my first start-up consulting clients, and Simpson and I had lively discussions over Wave’s business model, its messaging and how it was going to be positioned in a competitive marketplace.

In hindsight, Wave has succeeded because it hit the market with a compelling and disruptive service – free online accounting – that resonated with small business owners looking for an alternative to Quicken or Excel spreadsheets. While I wasn’t a big fan of free, Simpson believed that Wave could monetize user’s data to create a viable business model.

The company’s ability to raise $18.5-million in financing, which includes an original seed round, is significant because it demonstrates that Canadian start-ups can attract the growth capital that is required to become a major player or, at least, drive to become a major player.

OMERS’ ability to provide and participate in series A and B round can’t be under-estimated given this is where the Canadian venture capital ecosystem needs to become more robust.

May 15, 2012 BY Mark Evans Posted in Startups | Leave a comment

The Importance of After-Sale Marketing

For startups, attracting a user (free or paid) can be a huge challenge and an accomplishment given their fickleness and the intense competition.

It means having strong messaging about what the product does, the value propositions and benefits, and then making sure enough people become aware of it through different marketing and sales channels. There’s a lot of moving parts to win over a customer.

The problem for many companies, including startups, is their marketing efforts stop once the user is registered and/or the sale is completed. All the marketing work to get someone to learn about and embrace a product is seen as work done in the past.

The reality is, however, their marketing and sales efforts have to continue to convince customers they have made the right choice and, as important, give them new and different ways to leverage the product’s benefits. Pre-sales marketing drives awareness and conversion; the post-sales marketing keeps them happy and in the fold.

So how do startups keep customers/users happy? It starts immediately after someone buys a product or signs up to use the service. The confirmation email that is sent should do more than simply welcome someone aboard; it needs to provide them with ways to get into and enjoy the product, and keep on selling them on its benefits.

Afterward, the same approach needs to be taken. Rather than leave consumers to their own devices, a startup has to keep them engaged on a regular basis. It could be  newsletters that offer tips, news and value-added content. It could be Webinars, case studies, whitepapers, videos, stellar customer service, or emails asking for their thoughts and advice. Whatever the marketing “weapons”, they need to consistently used.

The goal is not to overwhelm customers with information but offer them a steady flow of different content that they can pick from depending on their needs. Some customers may want to be left alone until they need support, while other customers want to be pampered post-sale and, in the process, may become brand evangelists.

Regardless of the approach, a startup’s sales and marketing efforts need to continue throughout the consumer life-cycle. This is basic blocking and tackling activity that applies  to most brands, but it’s particularly relevant to startups that battle so hard to capture someone’s attention that not doing whatever it takes to keep them aboard is like cutting themselves off at the knees.

What are your thoughts? What are some of the things startups need to do post-sales or post-registration to keep consumers engaged and sticking around?

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May 14, 2012 BY Mark Evans Posted in Startups | Leave a comment

MaRS Presentation: Marketing for Startup Entrepreneurs

I was recently invited by MaRS to do a marketing presentation for its Entrepreneurship 101 program. It was nice to be invited back and, at the same time, fascinating to see how the presentation and my experience has evolved over the past year.

While social media has become more entrenched as a marketing and sales tool, the common denominator is the importance of storytelling, regardless of whether those stories are told – be it Websites, social media, videos, brochures, case studies and white papers.

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May 12, 2012 BY Mark Evans Posted in Social Media | Leave a comment

This Week in Canadian Startups

Just an FYI that “This Week in Canadian Startups” has become a weekly newsletter rather than a blog post.

Here’s where you can subscribe to receive a summary of Canadian start-up news, as well as interesting blog posts and articles about the start-up landscape. The newsletter goes live every Saturday morning, providing the perfect complement to coffee and the weekend newspapers!

May 11, 2012 BY Mark Evans Posted in Startups | Leave a comment

Why Startups Shouldn’t Be Afraid to Sell

startups salesI like startups that sell a product. It means they’re operating a business that hinges on getting consumers to spend money as opposed to offering a product that enough people will like that it magically delivers a way to generate revenue.

In my opinion, too many startups are afraid to sell their products. They’re afraid there’s too much competition, they’re afraid not enough consumers will be willing to pay for it,  and they’re afraid of not getting the traction to attract investors or an acquirer.

Instead, they take the easy way out by offering their product for free and, even worse, they have no clue about how they will drive revenue. Honestly, it’s a cop-out and shows little confidence in the value of their product or the product’s ability to solve a big enough problem that a consumer would be willing for it.

As a result, you get a startup that may have a popular product but the only financial salvation is being acquired. The problem is it’s like buying a lottery ticket so the odds of “winning” are slim. As much as Instamatic got a lot of attention, it’s a fluke or the equivalent of getting hit by lightning.

Some startups try to hide their fear of selling by embracing a “freemium” model, which often means that if someone really, really wants to pay for it, the startup will take their money. In most cases, however, the free version  is so robust and feature-rich, there’s no reason to upgrade to the premium version.

Yes, there are exceptions to the rules such as DropBox, Skype and Freshbooks but freemium is a difficult game to play, particularly for anyone looking to build a solid business.

What I like to see are startups that develop a product that addresses a point of pain, engages or entertains but has enough value to justify selling. It’s a simple proposition: the product does something consumers need so it’s worth buying.

I’m not sure why so many startups shy away from selling their products but I think one of the big reasons may be that initial sales can be challenging. It’s tough to convince the first group of consumers to pay because no one likes to be first and there is a digital culture that most products are free, so why would anyone have to pay for a product.

To sell, it requires a startup to have confidence in their product and take a leap of faith that consumers are willing and happy to open their wallets. While it’s easier to avoid the entire situation by just giving away a product, it’s a huge hurdle in the development of a real business that drives revenue and profits.

My advice to startups: don’t be afraid to sell. If what you’re offering is not being bought, it probably doesn’t have enough value, which means you need to figure out a way to build more value into the product as opposed to simply adding more features.

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May 8, 2012 BY Mark Evans Posted in Startups | Leave a comment

What’s Your Story, Morning Glory?

startupsEveryone likes stories. Our love of stories starts when we’re children, and keeps on going. For startups, telling a good story is as important as creating a product or service that solves a problem, makes life easier or simply entertains.

So it is always surprising (and disappointing) when a startup does a bad job of story telling, particularly if they have a good product or service. Without a good story, many people may never discover the service because the initial impression is it is not compelling, interesting or useful.

The thing about good stories is they’re told in multiple places such as a Website, video, social media, elevator pitch, product demo and sales/marketing presentations. The story is the same across the board, although it’s told in a slightly different way depending on the platform or medium.

Why are stories so important? In a world in which people are time-strapped, multi-tasking and not willing to invest much time in anything, the ability to quickly capture someone’s attention is more important than ever. At the same time, there is so much competition that it’s impossible to rise above the crowd without a good story.

So, how are good stories created?

Perhaps the biggest consideration is the need to look from the outside in. Many startups suffer from a lack of perspective because they’re so close to their product or service. As a result, it is difficult to create a story that resonates with target audiences.

To develop good stories, a startup needs to talk to potential and existing customers, it has to look at how rivals tell their stories, and it may have to bring in outside help to get a different view of what they do and why anyone would be interested.

Another important exercise is boiling down a story to something basic and easy to understand. It’s like gutting the inside of a house, which creates a clean slate. For a startup, the creating a simple story starts with “We make X so [customers] can Y (e.g. save time, reduce costs, etc.).

Once this simple statement is created, the story can then be bolstered by talking about what the company does is unique or different, and the benefits it delivers to users.

It seems like a straightforward process but it can take time to create good stories, and it can be a two steps forward, one step back exercise. One of the big hurdles is it can be uncomfortable for startups to embrace a story that’s different from what the one they’ve been telling for a while.

At the end of the day, however, it’s worth the time and effort because a good story helps to provide a startup with a clear mandate and mission. By having everyone “singing off the same page in the hymn book”, it becomes a lot easier to tell the world what a startup does and what anyone would care.

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