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The other day, a friend who runs a small business lamented that his Web site wasn’t worth the trickle of business it brought in. Something told me he’s not alone. In fact, some estimates have found the majority of small-business Web sites fail to generate revenue. Which is too bad, because I think that entrepreneurs like my friend make a mistake by blaming the site itself, or even the medium of the Web. The problem, in my view, is not the site—it’s the lack of trust in the company behind the site. Trust is an elusive concept, of course; the sort of term bandied about freely in Marketing 101 but rarely defined adequately since any of us found ourselves in that class. Building trust is important. Building trust via your Web site is essential. Now here comes the biggie: How?
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I am a professional board member. I’ve been sitting on boards for almost 20 years and I’ve seen a lot. I’ve seen some of the best board members in action and have tried to copy them. I’ve seen some of the worst board members in action and have tried hard to forget them. Here are some thoughts on choosing board members. This advice is for everyone, but it’s of particular use when you are a bigger company, maybe public, and need to fill your board with good people.
Category: Entrepreneurship Page 3 of 8
I had the opportunity to speak at The Wharton School, University of Pennsylvania last week about an article that Dr. Eric Clemons recently authored for the Journal of Management Information Systems, "An Empirical Investigation of Third-Party Seller Rating Systems in E-Commerce: The Case of buySAFE". My presentation was focused on marketplace economics and specifically about information asymmetry, signaling, the "Market for Lemons" concept, and buySAFE. In addition, I was able to share a few thoughts about my entrepreneurial experience with buySAFE.
As always, I had a great time as the guest of Dr. Eric Clemons, and I enjoyed hearing the passionate questions, insights and feedback from the students. One of the students posted an article about my visit on his blog, The Un-Wharton.
Should entrepreneurs worry about the loyalties of their lawyers? That is the question posed in a recent article on TheFunded.com, and to be honest, it is a fair question.
Most venture financings have closing legal expenses in the mid-five figures, and I know of Series B deals where the closing expenses have approached a quarter million dollars (yes, you heard me right… $250,000). At the end of the day, these expenses are ultimately paid for by investors. In addition, within local venture ecosystems, the venture lawyers obviously do many deals with the venture capitalists in their area over the course of time. These factors certainly create the potential for major conflicts of interest, and according to many entrepreneurs, the conflicts of interest are real.
My team has always had the benefit of terrific legal counsel, and we haven’t personally struggled with this issue. However, if you honestly assess the dynamics of the venture relationships as well as the economics of where and how corporate lawyers get paid, you will have to agree that entrepreneurs probably should be keeping a close eye on your lawyers.
As I mentioned, there was a terrific post on this subject at TheFunded.com – Venture Legal: A Conflict of Interest and a Complicated Mess. The author of this post hit the issue right on the nail.
As many of you know, 2007 was an amazing year for buySAFE as we accomplished more than 100% growth for each of the last four quarters. I expect buySAFE to continue to grow at a very fast pace in 2008, and so as you can imagine, that means we are looking to hire very talented people. Specifically, buySAFE is hiring exceptional software developers (see the position description below) and sales executives, but of course, we are always interested in meeting talent across the board.
If you are a VERY smart person that enjoys BIG challenges and wants to work REALLY hard on a talented team to help build a great company, then you and I should probably talk. Similarly, if you know someone that fits that description, please let he or she know that I want to talk to them as well.
Over the last few years, I have presented to dozens of venture capital firms while fundraising, and inevitably, the venture capital investor always asks you what valuation you are looking for. This reminds me of that job interview question we have all been asked… "What are your biggest weaknesses?" There really isn’t a right answer, but there sure are a lot of bad answers.
Stu Phillips does a nice job of explaining how to answer this important VC question on his blog, Soaring on Ridgelift.
One hint… Don’t answer the question!
Well, there is actually more to that conclusion, but you can read the details in Stu’s blog post, The Valuation Trap.
Nice post Stu!
Core Capital Partners, a venture capital firm that has invested in a number communications infrastructure companies particularly focused on the IP and VoIP, announced its participation in a $20 million round of funding for Gaithersburg, MD-based NextPoint™ Networks, Inc.
According to the investment announcement , NextPoint will be the result of the recently announced merger between NexTone Communications Inc., a software-centric session border controller and session management provider, and Reef Point Systems, Inc., a mobile access universal convergence gateway provider. In addition to Core Capital, other investors in this round include the round lead investor, One Equity Partners, the private equity arm of JP Morgan Chase (NYSE:JPM), as well as American Capital Strategies (NASDAQ:ACAS), Jerusalem Venture Partners, Safeguard Scientifics (NYSE:SFE) and Summerhill Venture Partners.
Read more about Core Capital Partners >>
Read more about NextPoint >>
Last week, I had the opportunity to speak to a few hundred business school students at the Robert H. Smith School of Business, University of Maryland. Michael Beveridge, buySAFE’s VP of Business Intelligence, joined me in speaking at the invitation of Professors Guodong (Gordon) Gao, Peter Weiss, and Mingfeng Lin. The students had previously read “buySAFE – Creating and Profiting From the Bonded Seller Advantage“, a case study on buySAFE authored by Wharton professor, Dr. Eric Clemons. Here is the presentation that Michael and I shared with the students… “eMarket for Lemons – The Economics of an Evolving eCommerce Marketplace“.
As always, it was a terrific experience for me. The students were extremely prepared, and they had definitely done their homework on buySAFE, information asymmetry, and the ecommerce marketplace in general. If you ever want to get an excellent sense of how well your marketing efforts are working or how well you are educating the market about your solution, I highly recommend inviting a couple hundred college students to study your product or service and let them give you feedback. I loved it!
Good morning everyone! If you know me well, you know that I am a voracious reader of anything and everything that I believe is interesting or useful either personally or professionally. My colleagues will attest to the fact that their Inbox usually has at least one article that I have recent found that might be useful for them or buySAFE. 🙂
Today, I have been catching-up on my reading list, and I thought I would share with you a few articles that I found interesting. Hopefully, you will some of the info interesting as well.
Steve
How can you drive up your holiday revenue? Build trust with your buyers!
That’s right. By simply spending a bit of time and energy thinking about how your consumers do their searching, shopping, and decision-making, you can increase your holiday revenues in a material fashion.
On Wednesday, October 24, 2007 at 11:00-12:00 PM MDT, I will be giving an educational webinar sponsored by Infopia and buySAFE on the subject of building trust with your buyers to drive up your revenues and
profits.
If you can spare an hour of your time, I promise you that you will learn something
new and interesting. If you are serious about building your online business, this will be time well spent.
Space is limited, so please register for the webinar as soon as you get a moment. You can register at https://www.gotomeeting.com/register/890705170.
Related articles:
“Infopia Integrates with buySAFE” – Infopia Blog
This week, buySAFE and ScanAlert, the provider of the Hacker Safe service, announced a huge partnership, and in my opinion, this is a great development for e-commerce.
Under the terms of the deal, ScanAlert will provide buySAFE’s Certified Merchant solution for free to its merchants during the HACKER SAFE account activation process and from within the account management console. In addition, buySAFE will make ScanAlert’s PCI validation services available to its merchants for free as well. This is truly a terrific combination for merchants and buyers.
Obviously, buyers want to find the right product at the right price. Once that has been accomplished, buyers basically care about two things when considering whether or not to make a purchase online…
- Am I going to get what I pay for?
- Is my private information going to be safe?
buySAFE is the best in the world at making sure buyers will get what they paid for. buySAFE does this by rigorously inspecting its merchants’ sales experience, online reputation, identity, and financial stability. Then, buySAFE monitors the merchant’s transactional history, in real time, for any sign of transactional or business default. Finally and perhaps most importantly, buySAFE puts its money where its mouth is bonding the transactions of buySAFE merchants up to $25,000 per transaction if requested.
Hacker Safe is amongst the best in the world at ensuring that buyers’ private information is going to be safe. They accomplish this goal by performing daily vulnerability scanning of their merchants’ websites. This helps to make sure that the merchants’ websites are secure and difficult for bad guys to breach.
Both companies are industry leaders in the online trust, safety and security world, and both have thousands of merchant customers using their services.
Again, it important for merchants to understand that their shoppers are concerned with two things… and Will I get what I paid for, and is my private information going to be safe? Optimal web site conversion metrics can only be achieved by answering both of these questions credibly. Together, buySAFE and ScanAlert are a powerful combination that will benefit merchants, buyers, and the entire e-commerce industry.
Related articles:
"buySAFE & HACKER SAFE in a Ground Breaking Announcement – Enabling Risk-Free eCommerce" on the buySAFE blog
"BuySafe Partners with ScanAlert/Hackersafe and CRE Loaded" on AuctionBytes.com