Friday, 13 April 2012

Ad Agencies have a future. thanks to Google. Alka Seltzer.

This is another part of an ongoing campaign by Google to "re-create" classic advertising campaigns from bygone years by bringing them into the digital age. It also does a great job for Google in showcasing their talents.

I've never seen Google as anything more than a glorified Yellow Pages with a Pool table in Reception and frankly, I think this series brings them right out of that into more of an online partner/medium.

Their efforts re-creating The "I'd like to buy the world a Coke", Coke story is terrific and if you haven't seen it, you'll get it here and really worth a look, I think.

The next up was for Volvo, "Drive it like you hate it" campaign and you'll see that here too

The third is now for a classic Alka Seltzer campaign from the US in 1972. Although I get it, I never thought it had the greatness of "Plop, plop, fizz, fizz" but it was hugely successful.

Here is the original commercial.

So what Google did was to re-unite the original creative partnership of copywriter and visualiser (art director if you like) and involved them in making the concept work online.

Here's the video as to how they went about and, regrettably, it's not as riveting as the others but you have to watch it to understand the last video, which is worth watching. Still....

So you get the drift. I think what made this interesting is that way in which they decided to execute the idea. Basically the concept is to show stories about what happened before he got indigestion - not a bad idea because it becomes engaging. Stories do that and when they're streamed to new devices, they take on a new life. 

Not bad. Not earth shattering.

But the manner in which it was executed on mobile particularly is pretty damn smart. Interactive and relevant.

So this is now well worth viewing. Amazing in what can be done today.

In some ways this shows the development of mobile too as a platform.
There's no doubt it can be effective, interesting and entertaining.

More than that, it can bring classic advertising into today.
Better than that, it can actually be the platform for classic advertising, created today.

Thursday, 12 April 2012

You must read this. The truth of business.

This is Paul Healy. Never heard of him? Me neither until I picked up 'Business Plus' magazine in Dublin in March (a magazine that I had a tiny involvement in helping at the start for Nick Mulcahy and Siobhan O'Connell and recommend to you). Now I want to meet Paul - and I will.

I never re-publish someone else's work. Never. But I was so taken by this story that I asked Nick + Siobhan would they mind if I blogged it and kindly they allowed me to to. So why am I? 

Because Paul's story is so true and real that I think everyone in business should read it and try to understand. It's absolutely heart felt and wonderful for those of us who have been start-ups or who want to be. I have - and every bit of it is me too. I know the pain and the joy. One day you're worth 30 million, 12 months later, you can't afford the petrol. 

Read it. You'll be joyed by it.

Here's Nick Mulcahy's intro and it's followed by Paul's own words;

Remember swapping football stickers and cards in the schoolyard? The practice has died a death with the Xbox generation, but Paul Healy, a former
tech journalist, is looking to bring it into the 21st century with the launch
of his new startup, Fantom.

Fantom is an online trading cards game aimed at teenagers. Users buy credits with their mobile phones, which can then be used to buy trading cards across a number of themes such as music, sport, TV, fashion and film.

Healy explains: “We generate random cards. Users buy a pack of them and try and collect a full set. Any duplicates they have they can integrate with the online community on the site and social media to trade them with other users.” The firm has signed several licensing deals with companies such as the Impact Wrestling group and Concept Cars.

Healy was managing director and a shareholder in recruitment firm JobFinder, which was sold to Stepstone in 2000 for €10m. He made a bundle from that deal but a startup he embarked on in 2008 went nowhere. He hit upon the
idea for Fantom when he saw his daughter playing the online dress-up game for girls, Stardoll, which is based around the paper doll concept.

Healy says: “Stardoll has over 120 million registrations and it employs 200 people in Stockholm. I realised there was no equivalent for young boys. There's a global opportunity for us.”

Healy, 49, took the idea to the Ryan Academy Propeller accelerator programme. The academy invested €30,000 for a 6.5% equity stake,
providing free office space for three months and mentoring. Development
work started on the Fantom site in the summer of 2011 and the business
launched in January 2012 after securing outside investment. Healy’s
vision has been backed by €600,000 from the AIB Seed Capital Fund, the
Dublin Business Innovation Centre, Bloom Private Equity, Enterprise Ireland and private investor Kevin Neary, founder of Gamestop.

But the journey from concept to trading platform wasn’t easy. Some weeks, Healy was so short of cash that he had to tap his mum for a loan to feed the kids. In what follows, this dogged entrepreneur reflects in his own words on that journey and the stress and strain he and his family had to endure to get over the line.

Now Paul's story....

"The day the wall fell down was a day for taking stock. Not the Berlin wall, mind. The wall in question was my garden wall, which I found on the
pavement upon returning home from a business trip to Scotland on a chilly, dark November evening. Indoors, there was a funny smell from the fridge, which had gone on the blink, the washing machine had given up, and the transmission warning light on the car suggested nothing good was going to come of it.

Question to self: “How much more of this can I endure?”

Endurance is a required characteristic of the entrepreneur. Most who attempt to make a living through risk and initiative endure continual setback before one of their schemes goes well. Unfortunately, as I have learned, they also inflict that pain on those around them.

Did you know that we Irish coined the term ‘entrepreneur’? Wikipedia attributes the word to the Irish-French economist Richard Cantillon, who died in 1734. Tellingly, Cantillon made his fortune on a bubble, the Mississippi bubble of 1719, and, as Wikipedia writes, “his success came at a cost to his debtors, who pursued him with lawsuits, criminal charges, and even murder plots until his death”.

My flirtation with risk and initiative began in 2008. A self-employed internet project manager and trainer, I started the year optimistically, predicting annual revenue of €80,000. I stayed on track until May and then did not make a single euro in the following seven months. I was the proverbial canary in the mine for the recession.

When your livelihood disappears and you have five children, giving up is not an option. With hindsight, what fascinates me is that I chose to do what I did. One of my clients offered me the chance to weather the recession with a job in the €60k range plus benefits. Instead, I started a company and rolled the dice.

Once upon a time, I was briefly almost a millionaire. It was May 2000 and I was a small shareholder in the phenomenal dotcom cash-out of the Irish website As we pulled away from A&L Goodbody, in whose offices we had done the deed, a colleague rang Frank Keane Motors in Blackrock and ordered a BMW 3 Series Coupe, with leather upholstery, air con, winter pack, alloys and low-profile tyres. He then turned to me and asked: “What about you?”

Since I had personally taken €750,000 in the deal, I said, without missing a beat: “Stick one of those on for me as well.”

Back home, my wife quickly reminded me that we lived in rented accommodation and the kids needed new shoes, that half of the deal was in stock (which rose, catapulting me into millionaire status, and then went to shit), and that there were some serious taxes owing on the rest.

Next morning I called the dealer and cancelled the car. But that was a sweet moment that I have always wanted to repeat.

I remember calling my mother to tell her that I was a millionaire, which was a bit of a stretch, but hey. All my adult life she had failed to understand what I did for a living, but she understood “millionaire”.

“That’s great son,” she replied, putting her hand over the phone and telling her house guests what I’d said. I could hear them in the background, clucking: “That’s nice. A millionaire! What is it he does again?”

Ten years later I was borrowing money from my mum to keep going, causing her to joke: “I am going to change my will. I will tell everyone that I loved them, and as for the money, talk to Paul; he has spent it all.”

My new business in 2008 was creating social media software targeted at niches. We tried it in politics, first with the European elections, then tracking
politicians’ output as iCitizen. Great idea, average software, poor business. There is a business tenet that runs ‘fail fast, fail cheap’. It took us 18 months to face up to what we knew early on: selling to politicians wasn’t a business. 

By October 2010 I had faced the fact that I didn’t have a viable product. True to type, I rolled the dice again. We pitched the DCU Ryan Academy and were accepted onto its new Propeller accelerator scheme: €30,000 investment, three months’ mentoring and free office space. A year ago, Propeller was the only investment money in Dublin prepared to back ideas as opposed to business plans. I told them that I could create an application that monetised the social media of celebrities and they bit on it.

I shipped up to Propeller in February 2011 with my team, a fancy marketing presentation, and a question: “Now what are we going to do?” Three months later we had a product concept, a business plan and a chance. But the money was gone. As you pursue your ambition, the darker side of entrepreneurship emerges. Risk-taking becomes recklessness, endurance becomes obstinacy, and those wellhoned motivational skills verge on manipulation as you take people with you to places they had no intention of ever going. The price is paid in quality of life, asset-stripping, poor health, and the removal of basic supports from family and team members.

Through 2010 and 2011, my family, who has been accustomed to the
trappings of South Dublin boom-time living, survived on my income of
€25,000 a year and a part-time teaching income from my now ex-wife. The fat goes first: Sky Sports, the gym membership, the weekends away, meals out. And then you get stuck into the muscle: the health insurance, the life assurance, the weekly food shop, the car.

I sold my car to a Polish lad who was joining the exodus home. In fact, I
practically gave it to him, for €100. I recall last April going to do a radio
interview for Dublin South FM in Dundrum Town Centre in a borrowed banger and not even having the money to pay for parking. To make the interview, I parked the car in the driveway of someone who was likely to be at work and sneaked off.

Most people reading that will think I mean I had no change in my pocket on the day. But in fact some weeks I literally had no money in my pocket, in my bank or in the credit union. To my shame, several times in the past year I have phoned my 76-year-old mother to say:

“Mum, I cannot feed the children tonight.” She would then move €30 into
my account by telephone banking. It was during these painful times that the garden wall fell down.

In investment circles, they call this, euphemistically, the ‘three Fs round’, in which friends, family and fools support you as you struggle to turn an idea into a product and a product into a business. I don’t know about fools, but the family has been incredible, particularly the women in my life: my partner, my mother, my sisters and even my ex-wife, all of them determined to keep me buoyed up with their support and their money.

The Propellor programme gave us the opportunity to flesh out the concept for Fantom, an online trading cards game aimed at teenagers. The next step was the seed-funding round, looking for professional investors to back a business plan, with no product and a six-month cash burn to get to trading. It started inauspiciously, in a dark Georgian scullery in Fitzwilliam Place, with no money to pay the bills at the end of June.

We did the rounds but the seed funds were dismissive of accelerator companies, citing a perceived massive gap between their expectations and where we were at.

Outwardly we were putting on our best face, but back in the office we were struggling financially, buoyed up only by a personal loan from a friend. I found that Enterprise Ireland were amazing. Our development advisor basically told us to ‘man up’, to stop begging for grants and to get a serious business plan into the seed funds.

The search for investment lasted six months and during the negotiations we continued the product build, while cutting everything in our lives past the muscle to the bone. We had a joke in the office called ‘Employee of the Month’, where one lucky person got to take the pile of Dublin bus refunds down to O’Connell Street and keep the total. On several occasions we walked to work, not even having the bus fare.

A spiky conversation with a prospective seed fund investor changed the game. “I’d suggest you go to London and come back to me in September,” he said. “Then I’ll ask you who you know. If you know nobody then we’ll know it was going nowhere. If you come back connected, we can talk.” Although I never got back to this individual, I took his advice and moved to London in July, rented a desk in Shoreditch at £10 a day and lifted the phone. 

London was transformative after the Dublin gloom; it was a positive, open
and business-friendly experience. By September I had licence deals, reseller understandings and connections with key people in the brand licensing community. It took another four months to close our funding round. But the tone of the investor conversations in Dublin warmed, so it was easier to keep the team together as everyone started to believe they would eat by Christmas.

Finally, on December 19, we closed our deal and delivered on our product
development commitments. Now it is time to turn a product into a business. But that’s another story.

When I look back, I liken entrepreneurship to taking a run at a cliff and daring yourself to go over. And when I ask myself how far would I go, I know now that I would go over the edge, expecting to grasp a few roots on the way down, to land on a ledge, or even, should I hit the ground, to bounce.

That’s not necessarily the point of view of a rational human being."

Extraordinary. And so real. Trust me.
Keep driving on.

Wednesday, 11 April 2012

A billion or a bubble.

The Instagram facebook acquisition for 1 billion usd, has a lot of people scratching their heads. 

Firstly, because the valuation last week seemed to be 500m dollars when the company raised 50m just before the acquisition, in the most bizarre piece of timing. But for a reason, be sure, as yet unknown.

So the valuation this week of 1 billion seems to have doubled real quick and as I think, most are saying excessively. Mind you, we said the same about the youtube acquisition then too.

Secondly, there is a view afoot that the main "hole" (albeit a small one) in the facebook ipo is China. As you know facebook is banned in China (as is Twitter and Youtube and 250 others) but interestingly Instagram isn't and anyone who has been to any tourist attraction, will know cameras and photography are big in China. Huge. As is Instagram consequently.

So this purchase might be about getting access to the big Chinese market. Big as in the biggest Social Media marketplace (500 million chinese are online through their own networks). And it's also a big market that's opening up in the traditional advertising and economic sense. It's where growth is.

Thirdly too, IPO investors more and more are themselves Chinese, so they're less likely to be active about buying Facebook shares at IPO because they don't know the brand very well. In fact few will ever have used it.

With Instagram, which they do know, they might be attracted in.

However, I personally also think that behind this purchase is just common sense. Facebook is about picture sharing and instagram is about the best there is in the space. It makes sense. 

(Interesting times too for the folks down at Pinterest, having now overtaken Linkedin as the third social media site and being picture based.)

However regarding instagram, what doesn't make sense is the manner and the price paid. The fact that it's a nice round sum of a "billion" (with the cash drain reduced by offering stock) sounds to be very like this was a competitive offer. 

It looks to me that there was probably another player and probably linked to the VCs who gave instagram 50m last week. It just seems to me to be a typical "here's our last offer, take it or leave it" of a "billion" all-in. I do think the valuation (and bidding) actually started at 500m but was forced up by two competitors. A little conjecture but I'll bet. 

What's worrying me, as someone who was here at the first dot com bubble, is the rising valuations for small companies with low employees, short track records and little revenue. And a sort of a "here's a billion, take it or leave it" is so reminiscent of everything from those days including Aol/Time warner

There's too much money about. I note too from plenty of forums, that there's a lot of VC fund-raising going on and again, this sort of 'war chest building' will further raise values and is so typical of bubble-building. If sellers know you have more money, they'll want it and valuations rocket. 

These valuations, notably over the last 4 months are getting scarily like before. And I feel like I know because I was part of the first bubble through an IPO of an ISP in March of 2000 on Nasdaq.

Mashable, which is a blog, nothing more (but I agree, a great blog) sells in March to CNN for 200m. 22 employees and Pete Cashmore indicating only 4 permanent, the rest being distance bloggers. Revenues not disclosed. 

Yahoo purchases Interclick for 270m late 2011.

Draw something, an app (yes, okay, a really good app) goes for 180-220m in March. Small company, app launched only weeks before the sale but good revenues. 

Apple today viewed as the highest Market cap ever at 600billion us dollars. Is there ever a company worth that? 

Instagram sells for 1billion usd in April to facebook

Anybody spot a trend? (And watch out for flipboard and pinterest)

In some ways this is the secret we daren't speak its name because a bubble we do want. More cash for more ideas, so we put down any talk of it. In fact, we talk it up. 

Big valuations too lure in investors not necessarily Internet savvy (remember myspace sale for 580m to Murdoch? Just sold to Justin Timberlake and pals in December for circa 50m). Those investors have cash through institutional or VC investing. And there's local Irish recent valuations that help confirm this.

There's no doubt ladies and gentlemen, that this is the space to be in. It has a real bright future. But highly excessive payouts and valuations serve no one, except sellers, in the long term. 

This is looking like another bubble. 

(Update April 24 - I mention here that the it seemed to me that there was an underbidder for Instagram which drove up the price. Reliable rumours abound that this was the case with Jack Dorsey (Twitter) being mentioned. Reliably!)

Monday, 9 April 2012

Instagram sells to Facebook today 1 billion usd. Zuckerberg explains. Blog update

I thought you might like to see this update on the purchase of Instagram today by Facebook for 1 billion usd further to my blog earlier this evening.This is Mashable trying to make sense of it all (and I admit as time goes on, so am I).

Firstly, note Instagram has 9 employees.....

Secondly then there's this from Mashable which is a step-by-step guide to deleting your Instagram account! Seemingly a bit of a groundswell starting to happen against the purchase. Reason being is that instagram pics have geo location information and there's a concern that facebook will use that for advertisers and that, could be the reason for the high price.

And then this post from The Zuck. Note the reference to independence for Instagram. Starting to divorce the two brands.....

Mark Zuckerberg - Facebook Status Update
I'm excited to share the news that we've agreed to acquire Instagram and that their talented team will be joining Facebook. For years, we've focused on building the best experience for sharing photos with your friends and family. Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook. we'
re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram's experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook's strong engineering team and infrastructure.

This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

We're looking forward to working with the Instagram team and to all of the great new experiences we're going to be able to build together

Instagram. The 1 Billion dollar App. Just bought by Facebook.

Welcome back and hello again.
I hope your Easter break was as good as mine!

But barely back when all of a sudden....Facebook buys Instagram for one billion dollars! You might have seen my piece on Instagram here

I also mentioned it on Friday as part of a point about the growth of mobile.

It's basically an App (but apples 'App of the year' last year) which improves photographs really well. Beautiful in fact and I'm guessing Facebook are looking to buy content players.

But in advance of an IPO? And a billion usd?
It seems hard to make sense of right now.
Still, content is king and I'm sure Facebook have a plan to cross sell and integrate but just it's a lot to pay for it....

Only just announced so it has also been kept real quiet.
I just wanted to let you know.

Blog back in full strength tomorrow.