The Valuation question is a question every entrepreneur eagerly expects and fears at the same time. It is a stamp of worth on what you worked so hard to create. It is The question, the one you’ve been waiting for all along and still the one you’re never sure how to answer. And in case you’re not yet an entrepreneur you may have still wondered about how these billion dollar valuations are made and how experts come up with the huge figures. If you are nodding right now, then this article is for you. However, if you expect this article to give you some exact straightforward answer then you’d better stop reading. We are not going to give you the exact long formulas used by financial experts and investors valuating your company. What we are going to give you in this article are a few tips that can help you get a more clear image about the valuation your startup will receive when discussing with a potential investor.
Jeremiah Owyang, Industry Analist and Partner Altimeter Group, spoke about “Social media and big business: trends for 2011”.
The year of 2010 is according to Jeremiah the year of social business formation. Jeremiah thinks 2011 will be the year of social business integration. For internal goals in 2011 social strategists will focus on measurement of ROI. They are currently using engagement measurements – fans, friends, etc. Companies will be focused on integrating social media with their corporate website. 76% of the corporations are going to spend money in the brand monitoring area according to Jeremiah’s statistics.
The biggest area of growth in 2011 is social media staff hiring. Jeremiah thinks social media boutiques will soon be bought by bigger corporations who need a social media expert.
Jeremiah’s advice for corporations as far as social media is concerned:
1. Hire correctly and properly for social media – don’t hire social media gurus and ninjas but social media program managers who will integrate social media correctly;
2. Pragmatically integrate social media on the corporate website then aggregate and curate. You’ve spent so far to get people to corporate website and now you shouldn’t be linking them away with no integration strategy;
3. If you’re going to invest in advertising invest in advertising that leverages social graph;
4. Developed an unpaid army of brand advocates – get your customers to do the work for you. Invest in advocacy programs that scale. You can never hire enough community managers to respond to your customers;
5. Invest in scalable systems like SCRM and SMMS (social media management systems);
6. Learn to measure using the right ROI.
You can find Jeremiah on Twitter at @jowyang
Dave McClure, who describes himself as Startup Investor and Troublemaker is the founder of 500startups.com – an internet startup and seed fund and incubator program in Mountain View, CA. Dave has been geeking out in Silicon Valley for over twenty years, and has worked with companies such as PayPal, Mint, Founders Fund, Facebook, LinkedIn, SlideShare, Twilio, Simply Hired, O’Reilly Media, Intel, & Microsoft.
Dave talks about global trends on the web. Accoring to him there are more and more old people and young people online nowadays. There is also more bandwidth and more video online and a growth of Global languages (there are more than 1 billion Mandarin and English speakers and more than 500 million speakers of Spanish, Hindi, Arabic and Portuguese). This means that you can build projects for your local market in one of these languages that appeal to all the world.
Another obvious trend accoring to Dave is the smart device proliferation – phone, tablet, TV, console, etc – as well as the acceleration of global payment and e-commerce. On the other hand product development and customer acquisition have more and more reduced costs.
Dave’s advice is to dominate your local/native market first or to move so that your local market is bigger (China, US).
Dave recommends a few books – “Spent: Sex, evolution and human behavior” by Geoffrey Miller, “Influence: the psychology of persuasion” by Robert Cialdini and “Understanding comics: the invisible art” by Scott McCloud.
Dave’s opinion is that you don’t need to be in Silicon Valley, but Silicon Valley needs to be in you wherever you are in the world.
The main conclusion of Dave’s presentation was: Start local, hustle global.