Minnebar 2009 Sets the Tone for Minnesota Start-ups

On November 21st over 600 developers and entrepreneurs got together to discuss what’s important to Minnesota tech start-ups. The halls that Best Buy legendary founder, Dick Schulze, built made for a great location for the next wave of Minnesota entrepreneurs to begin spreading their wings.

Several Minnesota start-up thought leaders were on hand including Graeme Thickens of Minnov8.com, Robert Stephens, founder of GeekSquad, Justin Porter of the University of Minnesota Venture Center, and John Roberts attorney at start-up friendly New Counsel. There were many young Minnesota entrepreneurs on hand including Mynul Khan founder of FieldNation, and Adam Sellke of Evolve (recent semifinalist at MN Cup 2009). I was surprised that there were several Minnesota entrepreneurs who had multiple successful companies with exits.

Minnebar cofounder Ben Edwards led a very interactive roundtable discussion for web app builders. Ben’s leadership was clearly on display as a large group of primarily independent developers came forward with their questions on how to market the technology they built. It was very interesting to hear a group of developers discuss marketing issues. As an Internet company founder, I know you need to wear a lot of hats from my first hand experience.

The most heated discussion of the day was “Bootstrapping your Tech Start-up” led by Kevin Spreng of Robins, Kaplan, Miller & Ciresi. Kevin provided tips for bootstrapping entrepreneurs such as hire contractors rather than employees, go without an office, and focus on execution. Near the end of his session, Kevin stated that marketing agencies were a black hole because marketing agencies spend a lot of money, and he advised start-ups to handle their own marketing. Curt Prins, Executive Director at District 202 and marketing guru, responded with his disagreement and said not all marketers needed a large budget to accomplish results for start-up entrepreneurs. A rather lively debate ensued (see tweets under #minnebar). Nice work Kevin and Curt in driving a stimulating discussion on the topic of bootstrapping.

Justin Grammens led a packed session on how to develop Android applications. Justin explained how, unlike iPhone apps, Android apps require no certification or approval. He also created a simple “Mobile Twin Cities” app during the session. I was amazed at how simple creating a basic Android application can be.

Dan Frankowski and Max Harper from Blue Shift Labs led a discussion on coding with Google’s App Engine that intrigued a number of developers. The crowd was very engaged. The scripting seemed pretty straight forward.

Mike Bollinger provided an introduction to HTML5. The tweets that followed said that HTML5 looked “amazing” and that users should stop using Internet Explorer 6 to increase the adoption rate.

Ryan Weber and I provided a summary of the top trends and winners in the application industry. Ryan forecasted that the integration of social and location-based mobile technology would be one of the most significant drivers of growth and change in the mobile app space.

My favorite discussion was the one facilitated by cofounder of Minnebar, Luke Francl, entitled “Midwestern Startups: What is Possible?”. Luke started by asking for those entrepreneurs that had worked in Silicon Valley to compare their start-up experience there versus their Minnesota start-up experiences. One such entrepreneur answered Luke’s question by saying Silicon Valley start-ups aren’t as afraid to fail as those in Minnesota. Another entrepreneur said the biggest difference was how much deeper the talent pool was in the valley. Finally, someone joked that when he was in Minnesota, whenever someone asked where he worked, he responded with “I work for at a start-up”. When asked the same question while at an iPhone meet-up in Palo Alto, the response was met with laughter. Why? In Silicon Valley, everyone works for a start-up. The discussion next turned to several ideas on how we can make Minnesota a better place to create a tech start-up. Among the ideas identified were creating an incubator fund modeled after Y Combinator, getting the University of Minnesota to raise money to fund local tech start-ups similar to what the University of Wisconsin started a year ago, the creation of a new Techcrunch-like Minnesota focused community site, and taking advantage of Minnesota’s significant number of Fortune 1000 companies to provide a distribution channel for Minnesota-brewed new tech. Michael Gorman of Split Rock Partners, one of the sponsors, closed Luke’s discussion by saying he was looking forward to seeing where we would be in another year. Judging by all of the energy, and the way the Minnesota developer and entrepreneur crowd is starting to support each other, I am confident we will see continued growth in the Minnesota tech start-up community. I am looking forward to Minnebar 2010.

Why Browser Add-ons & Net Neutrality Are So Important

John Lilly, CEO of Mozilla, and Mitchell Baker, Chair of Mozilla, co-wrote an opinion piece for the Wall Street Journal on October 29, 2009 called “Net Neutrality: Spur to Entrepreneurship”.

In the article, John and Mitchell publicly voice their support for the FCC’s recent “net neutrality” proposal. They say that since 1995, open Internet standards have spawned a generation of entrepreneurs who went on to create great companies like Yahoo, Google, Amazon, eBay, Facebook, Salesforce.com, Expedia, Monster, and Netflix. These companies alone represent nearly $300 billion of market capitalization. They say that users have also downloaded more than 1.6 billion Firefox add-ons created by a vibrant ecosystem of developers, from hobbyists to Fortune 100 companies, and that Mozilla has been able to compete on its own merits with the dominant browser, Internet Explorer.

Wow! Talk about validation for the small but growing add-on developer community out there. You have the CEO and Chair of Mozilla talking about how add-ons are a key part of the strategy in their competition head-to-head with Microsoft.

And John and Mitchell are right. Firefox does do a better job handling add-ons than Internet Explorer. It is commonly understood by add-on developers that Firefox is an easier browser to create add-ons for. One other supporting piece of evidence for this position is that the Firefox add-on gallery (https://addons.mozilla.org/en-US/firefox/) is over twice as popular as the Internet Explorer add-on gallery (http://www.ieaddons.com/).

Nice work, Mozilla, on the article and on your add-on strategy.

Here’s to net neutrality continuing into the future so another generation of entrepreneurs can build the next wave of great companies.

NativeX Launches New Video Ad Format

Sponsored Post

Introducing a new Mini Multi-Offer ad format “Triad.” Triad combines the latest mobile video ad technology with NativeX’s industry leading selection of native advertising formats to give users the choice of which ads to engage with. Triad joins the NativeX Discovery Suite to give developers the right ad format to optimize strategic placements in their apps for a more native experience with higher impact.

Read the Full Post Here.

See Video:

Trouncing the Recession like an Upstart!

The following two paragraphs were taken from an excellent post written by Donna Fenn. I highly recommend you pick up her book Upstarts!

“Small business owners are typically an optimistic lot, even in the face of dismal economic conditions. But a recent American Express OPEN Small Business Monitor survey found that GenY entrepreneurs are more optimistic than most. “More than three-quarters (80%) of these entrepreneurs have a significantly more positive outlook on business prospects versus GenX and business owners overall (each 55%), and Baby Boomers (52%),” the survey noted. GenY business owners were most likely to be hiring and making capital investments, and least likely to have cash flow issues and to be “stressed out” about the economy.”

Later on in her post, Donna provides highlights from a discussion we had about my experience as a GenY entrepreneur, and W3i

“Focus on your core competency. Robert Weber’s company, W3i in Sartell, MN, markets third party computer applications and has been growing 53% a year. W3i continues to post significant gains this year because, Weber says, he had the foresight to eliminate divisions of the company that were hogging resources without generating significant revenue. He shut down a lead generation business and sold a mobile applications business “we never really figured out how to integrate into our main company.” With a single point of focus — “to be market leader in applications distribution” — Weber says the company is well positioned for growth this year.”

Read Donna’s full post here

Why Shopping Add-ons (and Installed Applications) Are So Useful

This evening I went online to BestBuy.com to pick up a new monitor for my home office PC. My old monitor crapped out a few days ago, and I’ve been meaning to get around to purchasing a new one. I tend to avoid brick and mortar stores for consumer electronic purchases, and BestBuy.com is usually the first website I start with when shopping for consumer electronics. (Apparently, I am like most other online shoppers… I read a recent analyst report that ranked BestBuy.com as number one in total online consumer electronic sales.)

After using BestBuy.com’s user ratings to sort through and find the best-rated 23-inch monitor, I settled on an Acer H233Hbmid 23 inch Widescreen HD LCD Monitor listed at $209.99.

Thankfully for me, I use a couple of different browser add-ons which provide me with timely shopping related information while I am browsing the web. For this purchase, I followed through a relevant message that came up from PriceGong, which I had installed through W3i’s Install IQ process a few months back. PriceGong alerted me that CompUSA.com had the exact same monitor for $199.99 with no shipping and handling, and no sales tax.

Later on, I proceeded through the checkout on BestBuy.com just to see what my final total would have been had I purchased this monitor through BestBuy.com. With $14.99 for shipping and handling, and $16.37 sales tax, my total would have come to $241.35. I saved $41.36 because my installed application, PriceGong, recommended CompUSA.com while shopping at BestBuy.com!

Most tech bloggers talk down about any application that requires an install, such as Windows applications and hybrid applications, like the PriceGong browser add-on. Most tech bloggers are so caught up in the cloud these days that they fail to remember why operating system integration can be so useful. How can the cloud compete with the kind of timely information an installed application can provide?

The Risk of Heavy Customer Concentration

Just this week, local Minnesota-based Digital River lost its largest client, Symantec, which represented approximately 30% of their revenue. Based on the public reaction from senior management, it appears that Digital River was blindsided by Symantec’s announcement. The negative 38% impact on Digital River’s stock price was not too pretty. I had been hearing gossip and rumors for months that one of Digital River’s largest customers would likely walk from them, but the general sentiment was that it would be Microsoft and not Symantec.

According to a report Merrill Lynch put out, Symantec might not have been such a great account for Digital River after all. Apparently that portion of Digital River’s business had slowly been declining for a while now, whereas the rest of Digital River’s business had a higher growth rate. My prediction is that Digital River will bounce back. I have always been impressed by their resiliency as a company, having watched them from the sidelines for a number of years and hearing stories from former employees, such as Lisa Nistler, who works with me at W3i and who was recently promoted to VP of Marketing at W3i (congratulations again Lisa!).

Do you have a good customer concentration story or perspective on Digital River’s future? If so, please post in the comments of this blog post.

I’ll give you a customer concentration story of my own… The risk of heavy customer concentration is one of the core weaknesses of W3i’s closest competitors, the toolbar players. W3i’s competitors that are dedicated to toolbar solutions that are monetized exclusively through search feeds run a very high risk tied to the search market. When these competitors have any kind of hiccup with their search feeds, whether it be from a reduction in rates from their search partner, a change in toolbar usage behavior driven by a new browser release, or any other possible factor, application publishers who use these competitors to provide revenue within their installers can see a sharp decline in revenue very quickly. I am so thankful that our business model is centered on a marketplace approach, where we provide a wide range of application offers, including toolbars and other high-revenue-generating Windows applications, versus the toolbar-only model.

The Secrets of a Successful Sales Team

Recently I was interviewed by Britt Johnsen for the latest quarterly issue of ROI Magazine.
UPDATE 11/13/09- The article is no longer available online

I thought Britt did an excellent job summarizing the best practices of Central Minnesota sales leaders in her cover story “The Secrets of a Successful Sales Team”.

The following are the “Top 10 Ways to Build a Sales Team” as summarized by Britt-
1) Hire the right sales people
2) Hire the right sales manager
3) Maintain relationships
4) Check your motivations
5) Standardize approach
6) Develop metrics
7) Make a plan and a strategy to follow it
8) Keep an organized system
9) What makes a great sales team makes any great business
10) Continue learning

For both 5 and 8, Britt cites specific examples I shared with her about W3i’s very talented sales team.

Twin Cities Young Entrepreneur Award Pictures

About a week ago on Twitter I posted a link to a picture I took of Daren Cotter (Cotterweb founder), Ryan Weber, and myself with the new Minnesota Timberwolves head coach Kurt Rambis as a part of the Minneapolis/St. Paul Business Journal’s Young Entrepreneur Award event.

The Minneapolis/St. Paul Business Journal posted quite a few more “official pictures” of the event on their Shutterfly page. To access the pictures, use the password- pictures
and click on the collection called “Young Entrepreneurs”. You’ll have to browse around a little bit to find the ones of the Weber brothers.

How Brands Can Drive Mobile Application Distribution

This post is in response to Ad Age’s How Brands Can Build a Successful App Strategy-
12 Lessons From Benjamin Moore, Bank of America, Kraft and Others
article.

Is it about creating a niche application (see mickeylonchar’s comment), or is it about having an application distribution strategy?

Social media and existing assets can certainly provide a spark to your application distribution strategy, but what do you do if you don’t have many fans to begin with? For the #13th lesson learned, consider “Get other popular applications to recommend your application.”

I’ve been looking at vendors which might be worth considering to drive application recommendations. Here are a few I have come across-
AppsFire
PurpleTalk
MobClix< Pinch Media Medialets

Mobile applications are a great tool for advertisers to increase engagement with their fans if advertisers can successfully generate wide distribution, but what about other application types? Other large media and e-commerce players are quietly getting very significant results from Windows applications and hybrid applications like Adobe AIR and Firefox add-ons. See white paper

GenY Entrepreneurship

I just started reading Donna Fenn’s new book, Upstarts. I first heard about the book when Donna contacted me as part of her research. Donna has a great perspective on what drives today’s young entrepreneurs. Her perspective on GenY reminds me of a book I read on vacation a couple of months ago called Growing Up Digital.

Two entrepreneurial stories in the book really hit home for me. The two stories were Nick Thomley’s Pinnacle Services and Matt Brezina’s Xobni.

Now 29, Nick created Pinnacle Services in 2000 to provide employment, housing, and in-home services to seniors and people with disabilities in Minnesota. Nick and I actually went to school together for a couple of years when we were very young. I bumped into him a number of years later through my sister-in-law Jennifer Castillo who does program planning for Hennepin County. More recently, Nick and I were honored as young entrepreneurs of the year by the Minneapolis St. Paul Business Journal. Although I am not at all involved in the type of work Pinnacle does, I have a great sense of admiration for the risk Nick took to build a great socially needed business, and now topping $9 million in annual revenue, no one can argue with his success.

Matt Brezina co-founded Xobni in his late twenties. Xobni is a plug-in that brings Outlook to the Web 2.0 era. I have been a big fan of Xobni since I started using their application in March of 2009, and we became business partners in April 2009. The company I co-founded, W3i helps distribute Xobni to massive amounts of new Outlook users. As Donna describes in her book, when it came to Outlook, would we have expected this kind of new innovation to come from software executives in their 40’s? Hardly…

Congratulations on a very interesting, well researched book Donna! I look forward to reading through the rest and sharing it with other young entrepreneurs.