Perspectives

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I have had the pleasure in the last week of becoming intimately familiar with Mailchimp, the Web 2.0 version of Constant Contact.  My overall impression of Mailchimp is that it is not only fun, but satisfying to use.  That’s what a Web 2.0 product should be about.

To summarize, Mailchimp is an email program which we just started using to send out HTML emails.  Our list has grown to over 700 members of the Chicago technology community, and we wanted to communicate with that list in a professional, clean way, and not through our tacky, 1990’s-style listserv that so many of you have expressed dissatisfaction about!  Mailchimp allowed us to seamlessly import our contacts and design a professional campaign, as well as use many other features like inbox inspection (see what your email will look like in 30 email clients) and delivery doctor (get past those pesky spam filters!).  In addition, Mailchimp provides an interface that is easy, fun, clean, aesthetically pleasing and at some points, humorous.

Point being, I was having so much fun using Mailchimp to design our most recent email campaign that I actually enjoyed paying them money.  That’s right.  I actually enjoyed sending them more money, for several reasons:

1. They presented a product interface that was quick, easy-to-use, and very very pretty
2. The roundness of the application and its confidence made me confident that the services I was paying for are worth every penny
3. I believe that they deserve the money, because I believe that a good business should be rewarded!

I bring this up because very often we see in the Web 2.0 space a focus on design and functionality, but not necessarily a focus on customers or satisfaction.  Mailchimp is an example of a Web 2.0 app that not only looks cool and works well, but also does what I need.  I don’t mind paying extra for some features because the whole package works better with them.

I look forward to seeing what the next Web 2.0 apps are that challenge our notion of how business is done.  Look at what Mailchimp has done with a combination of good design, seamless functionality and a little bit of humor.

What’s your favorite Web 2.0 app and why?

I noticed an interesting similarity between entrepreneurship and sustainability. Aside from the causal relationship (entrepreneurial innovation leads to more sustainable practices) there is also an analogy to be drawn between the short-term self-interests of private institutions who do not currently proactively fund either sustainable development or startups, and the public goods created by entrepreneurship and sustainable development. In other words, the Principals who possess the capital (corporations, funds, wealthy individuals) do not adequately invest in either risky startups or sustainable development, since most of the positive externatity of those investments cannot be quickly monetized. Invention raises the standards of living, and Sustainable development preserves ecosystems. Yet a private agent, by current market forces, often does not have the private incentives either to invest in their own sustainable practices for long-term efficiency, or in the equity investment of high-risk startups due to a lack of strategic focus.

The bottleneck is most often that entrepreneurship and sustainable development never get off the ground and remain in ‘idea land’ since any collaborating agent must set aside his own short-term self-interest in order to cooperate with other self-interested agents on a goal that might profit the public as much as it profits the institution. Sometimes the goals run in parallel, such as corporate investment in electric cars or alternative energy patents, where sustainable outcomes are also privately profitable to the investor. Yet often the goals are divergent, when an entrepreneur cannot bring his invention to public market because it might be more convenient to the investor or partner to create artificial scarcity, or a startup may not get funding from any one institution because each institution may want to develop the technology internally (or not at all).

Private institutions often create artificial scarcity of information, where a startup may have a technology whose distribution is both a private good to the investor or partner, and a public good to the economy. Yet what that invention is, how it can be used, and who might best take advantage of it is effectively privatized and kept secret via the corporate partners. The question of ‘who has the incentive to help fund, distribute, and integrate this innovation’ is similar to ‘who has an incentive to integrate this sustainable campaign’ in that few individual agents have the incentive to best capitalize on innovation within the context of public good. Often these innovations and sustainable campaigns are funded by universities, private benefactors, the government, or corporations looking to make a PR play. Yet both entrepreneurship and sustainability are not ’systemetized’ to incentivize all parties to act both out of private incentives and public good. Therefore it is a campaign for the next century to systemetize, through PR and marketing as much through legislation and tax credits, the macro-processes of discovery and distribution of innovation whose greatest benfactors may not be the investors but the public at large.

I was reading techcrunch and came upon this article

http://www.techcrunch.com/2009/12/13/how-to-pitch-vc/

Now admittedly I am not the foremost expert on pitching to VCs, though I’ve had the luxury of doing so on several occasions. This article gives some good broad strokes on pitching to venture capitalists, yet I believe it misses the ‘relationship’ part of the deal. You’re not pitching a product, you’re pitching a relationship, which means you need to know more about your partner.

1. First, tell the investor why your company is of strategic value to the investor. In other words, if the investor has a portfolio company in the same industry as you, which would make a great partnership opportunity, cite these overlapping incentives. You might even want to chat with the strategic portfolio company before you pitch the VCs.
2. Find allies on the VC team. You aren’t going to sell the entire team on your idea, but you can convince at least one team member to “champion” your cause. Ask the VCs a question such as “how long will petroleum be a feasible energy source” and “has your firm invested in alternative energy solutions?” in order to find out who on their team answers, gets excited, and is worth contacting later on.
3. Create a next step during the pitch. For example “We are hosting an alternative energy fund raiser this Friday, I would like to invite your team”. There are no rules stating you can’t invite the investors to social events. In fact, at the IVCA several VCs unanimously agreed they would never fund an anti-social entrepreneur.

I also confess that, should your product already have exponential growth and a ton of press, you may not need to spend as much energy creating relationships with the investors, since investors might just court you. Likewise, if one VC firm champions your startup, the second or third firm included in your current round of funds will not need to be courted quite as much. Yet I am a big believer in creating a relationship as being just as significant in securing investment presenting your product.