Venalytica

Social Selling

2011-02-12T05:13:00.000-08:00

Shoppers can be segmented into many demographics but one thing is clear. A large segment likes to follow the herd.

We first witnessed this when the XBox came out. The news showed lines of people waiting outside department stores to be among the first to get their hands on this new gaming machine back in 2000-2001.

The same phenomenon has repeated many time, most recently for the Verizon iPhone. How do brands create such powerful buzz around product release? And why do people so easily get so wrapped up in a new product?

The Internet has magnified a tendency already present in people's psyche. And social networking has further amplified that by exposing the neighbor-next-door's buying preferences.

The herd mentality works but only if a product has some appeal to start with. And it doesn't have to be utility as the iPad demonstrates. It's still hard to pin down what need exactly it fills. Is it a mini PC, a Netbook, a reader, or a planner? Any, none or all of the above? All people know is they have to have one.

What Consumer Preference Analytics by Venalytica attempts to do is separate products by their attributes so a consumer may select amongst alternatives. It does so within categories. A retailer using CPA can measure the impact of marketing campaigns and social media. And they can do it in real time, a necessary feature in the fast-paced retail environment where one day Guitar Hero is the hottest item on the market and the next day is being discontinued.

CPA applies science to measure and respond to human impulses that drive purchasing. And it helps retailers and manufacturers anticipate which products will create frenzies and which ones won't. Add in a healthy amount of social media monitoring and you've got a more nimble and profitable online retailer.

So as the buzz begins to grow on Facebook and Twitter around a new product release, CPA measures the strength of desire for products and their attributes. An example is touch screen. As the iPad craze ramped up, the demand for touch screen and touch pad devices also increased. CPA would see this spike in real time piping data through the supply chain all the way to the designers. The result is more responsive product offerings hitting store shelves faster.

The sales ecosystem has changed with the Internet and social media. Human behavior has remained the same.

Marketing faces more data, more demand for analytics

2010-07-14T09:25:00.000-07:00

Marketing faces more data, more demand for analytics

By Jim Schakenbach, Special to Mass High Tech

This is both a scary and exhilarating time to be in marketing and advertising, depending on your perspective. The meteoric rise of social media and the growing consumer power associated with it have been compounded by the proliferation of niche media channels and the diminishing impact of traditional broadcast and general interest media. As a result, marketers and advertising agencies are under increasing pressure to produce meaningful, measurable marketing campaigns to reach fractured target audiences.

As marketing professionals struggle to make sense of the expanding stream of data flowing from a wide variety of sources and platforms, it appears that the sector is entering what perhaps can be called the Analytics Era. Growing numbers of IT companies, software developers and advertising agencies are racing to aggregate, integrate, analyze and understand an astonishing amount of data from marketing programs, advertising campaigns and product purchasing reports.

They are attempting to turn all that data into usable information that can provide clues for creating even more effective messages and channels to influence consumer spending.

“As more devices and channels become available, it presents new challenges to marketers and advertisers,” said Kiki Mills, president of the Massachusetts Innovation & Technology Exchange (MITX) in Cambridge, an Internet business and marketing association. “Everyone’s collecting data, but how can they get meaningful data? That’s the bigger question.”

In response, new applications and technologies are emerging to manage and manipulate data throughout the entire promotion and purchasing process. It is perhaps no coincidence that several of this year’s MITX Technology Awards went to companies involved in some aspect of data management and analytics, including DataXu of Boston, an online advertising optimization platform developer and Modiv Media of Quincy, which is developing in-store systems for delivering targeted, real-time promotional and purchasing information to consumers.

MITX online advertising category winner DataXu is a company that is “taking a lot of data from the Internet — a lot of consumer data and media data and applying machine learning to basically recognize consumer patterns and media patterns that correlate to sales,” according to CEO Mike Baker. DataXu’s patent-pending technology was developed at MIT by its founders, creating a platform that uses real-time consumer preference data to value, bid-manage and buy ads on an impression-by-impression basis, across online ad exchanges operated by Google, Yahoo and others.

A little over a year old, DataXu is backed by Boston’s Flybridge Capital Partners and Atlas Venture, as well as West Coast venture firm, Menlo Ventures. The company launched in September 2009 at the TechCrunch50 conference in San Francisco, where it was recognized as having one of the top 50 hottest new products.

In a similar vein, Visual IQ Inc. of Needham, helps ad agencies, marketing firms and advertisers mine the growing glut of data across expanding media channels to better understand customers and determine how to reach them. As a former advertising executive, Visual IQ CEO Manu Mathew said he understands the pressure to find the most efficient channels.

“Today, to effectively reach the consumer, (you) have to hit them at different times with different messages in different channels,” he said. Visual IQ has developed a platform to help marketers “gain control of that data stack” and optimize their ad spend. A couple of years old and bootstrapped by its partners, Visual IQ is seeking venture funding to expand its sales force after landing such top shelf clients as AT&T and American Express.

Once customers have been lured into stores by advertisers using technology such as DataXu’s and Visual IQ’s, customized offers and discounts can be delivered to individual buyers based on buying profiles using technology developed by Modiv Media of Boston. Modiv built a business model around a trend called “shopper marketing,” which director of product management Matt Volpi said has advertisers “putting their campaigns in the mindset of the shopper instead of looking at the vehicle as the focus.”

Instead of using a particular channel to broadcast a generic offer to all customers, Modiv’s technology enables the retailer to mine customer purchasing history data to push a specific offer to individual customers based on their preferences.

So where is all of this going? In short, to a place where marketers can reach individual consumers with increasingly targeted messages across all channels, from websites to email to smartphones. But, cautions marketing analytics expert Cesar Brea, partner in marketing analytics firm Force Five Partners, there comes a point of diminishing returns.

“Maybe instead of integrating so many different data sources, you integrate, say, just three and execute really well in them, getting maybe 80 percent of the benefit without struggling with those many other sources and perhaps not executing as well.”

Jim Schakenbach is a freelance writer in Jefferson.

Gloomy data for VCs, but web startups thrive

2010-07-14T08:01:00.001-07:00

Gloomy data for VCs, but web startups thrive

By Galen Moore

Two venture capital industry trackers released dour news this morning. Analyst firm CB Insights reported $5.9 billion invested over 612 deals in the second quarter of 2010, indicating the industry’s recovery appears to have hit a plateau. Meanwhile, a survey of venture capitalists published by the National Venture Capital Association (NVCA) said most U.S. VCs expect their asset class to continue shrinking.

In the U.S., VCs invested just 11.3 percent more dollars in Q2 than they did in the year-ago period. Activity was flat – with one less deal closed than in Q2 2009. VC’s “tepid” recovery may indicate a “new normal” for funding levels, around $20 billion to $25 billion. In 2007 and 2008, VCs invested closer to $30 billion a year.

Meanwhile, 90 percent of U.S. VCs expect the number of domestically active firms will shrink between now and 2015, according to the NVCA’s survey of 500 venture capital investors. VCs in China, India and Brazil are more optimistic, predicting venture will add firms in their countries during the same time frame. European and Canadian VCs also predicted contraction – although not as drastic as their U.S. counterparts.

However, VCs appear to have recovered their enthusiasm for seed investing in Internet companies. Last year, cautious VCs seeded just eight Internet startups during the second quarter, with $7.4 million in total, according to CB Insights. In this year’s second quarter, 25 Internet startups got $23.1 million.

Dow Jones VentureSource is expected to release its venture financing data on Saturday. The NVCA’s financing report is likely to emerge next week.

What Venalytica Has In Store For You

2010-06-30T13:17:00.002-07:00

There have been many articles about the need for an in-store mobile application that increases the likelihood of a purchase from the store rather than using the store as a showcase for an item that can then be purchased elsewhere over the Internet.

Big Potential for In-Store Mobile Marketing

Tapping Apps for Personalized Retailing

Such an application has been developed by Venalytica. The mobile application enables the purchase of many different product types and from many different participating retailers. Each has a live feed of the available inventory. The patent pending Venalytica algorithm solicits importance-to-purchase characteristics from the consumer in order to point them to the best product for them.

An in-store shopper using a mobile phone simply selects an item like HDTV's, and the retailer, BestBuy, for example. Then, using the slide controls, the consumer indicates what is important.

Why buy in-store? Convenience is the number one reason. The Venalytica application has selected an item that is likely right in front of you. All you need to do is have it brought out to your car and drive it home. You don't have to wait weeks or pay exorbitant shipping costs. Further, you have a superior path for returns if needed since the store is local to you.

Meanwhile, as different products are displayed, the server is collecting importance, brand, model, location, and other data that can be accessed via dashboard or API by retailers and OEM's.

As more retailers and products come on board, Venalytica aggregates massive amounts of data across many products and retailers both online and in store. This data captures changing buyer habits and segments them across the country by location, gender, age, brand, retailer, etc.

Look for the roll out of this application this summer. And if you want your store included, be sure to contact Venalytica.

From MassHighTech

2010-06-24T08:15:00.001-07:00

Wednesday, June 23, 2010

How I See It

It's time for innovation in financing innovative startups

By Andrew Updegrove, partner at Gesmer Updegrove LLP

Video Gallery

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All across New England, a new wave of innovation is evident: proponents of “lean” bootstrapping are meeting to compare notes; incubators of all types are springing up while the granddaddy of them all, the Cambridge Innovation Center, expands dramatically in size.

Meanwhile, entrepreneurs are developing and rushing products onto new mobile platforms and into the cloud. It seems like innovation is everywhere.
It’s everywhere except, of course, in startup financing. Compare a venture capitalist’s term sheet from 1980 to one drafted today and you will be hard pressed to find a meaningful difference. To the extent that the VC investing model has evolved, it has done so by becoming more narrowly selective. Back in 1980 (or even 1990), many funds would look at almost anything innovative with high growth potential. But now? VCs complain about too much money chasing too few deals, but the real issue isn’t any scarcity of quality business plans. The problem is how small the eye of the needle has become that those plans must squeeze through.

Angel investors have become more selective in their interests and more rigid in their deal terms as well. Most now invest only through groups that use VC-style term sheets and criteria.

The sad reality is that while dramatically more money now flows into emerging companies, the percentage of companies eligible to access these funds has greatly decreased. All that money is clumped into much larger funds and angel groups, all seeking the home run opportunities that, coincidentally, carry the highest risk. Meanwhile, the far greater number of companies able to hit doubles and triples with much less chance of a washout goes largely unfunded.

Now, that is strange, because normally when an unserved niche appears in the marketplace, savvy observers move in to exploit it. Not so with finance, though. Investors are willing to fund the innovation of others, but the founders of the funds they entrust their money to don’t seem to be very creative at all.

This lack of vision is bad for investors and entrepreneurs alike. Over the last 25 years, the failure rate of minimally capitalized companies we have represented has been very low. But the frequency with which these same clients have achieved exits in the $10 million to $100 million range five to ten years after formation has been very high. Had financing been available, most of these companies would have taken it, and their investors would have profited quite handsomely.

Today, the opportunities for non-VC profile investing are greater than ever because costs and time of development are way down for so many types of products and services.

It’s not particularly difficult to design new investment models that fit well with market realities like these. Years ago, I designed a variety of term sheets which attracted funding in exchange for royalty rights in already developed, high-margin software products. Investors could assess factors such as competition, sales strategy and customer reaction at the time of investment rather than guessing what the marketplace might be like years in the future when the product was finally ready for launch. They also began to receive a return on their investment, and a reduction in their risk, within six months.

The moral is that there’s more than one way to structure a deal that will work for both sides of the money equation. Investors and their financing models should adapt to address current opportunities, rather than letting some of the best, and lowest risk, deals pass them by.

Andrew Updegrove is a regular contributor to Mass High Tech. He can be reached at andrew.updegrove@gesmer.com.

The Multi Platform Solution

2010-06-22T07:20:00.000-07:00

The Venalytica solution is the best multi platform conversion boosting application to come along in some time. Why? Our unique algorithm utilizing metrics and consumer preferences provides the consumer with a ranked list of search results, not the hokey relevance guesswork performed by last generation marketers.

By providing a match strength indication, we can better optimize the limited screen space found on mobile phones, tablets, kiosks and Facebook windows. Our in-store solution is especially compelling for those seeking help with choosing phones, TV's, appliances, music players and computers.

And when you combine the vast amount of consumer preference data coming from all these sources, you can create analytical information of immense value to retailers, OEM's and consumers.

We'll be rolling out our multi platform application one product, one retailer at a time as we gather new custoemrs. Watch for the "Powered by Venalytica" label.

Venalytica is Entered in MassChallenge

2010-06-22T07:05:00.000-07:00

Venalytica is in the MassChallenge competition. We were honored to receive a sponsorship from Mass Technology Development Corp (MTDC) and posted our pitch. It can be viewed at Team Pitches if you have an account.

We are looking for folks to give us a good rating as it helps with the judging.

Open Angel Forum Boston

2010-06-22T06:48:00.001-07:00

Venalytica was honored to be selected a finalist for the Open Angel Forum in Boston. I was happy to attend and meet new people. The other 5 companies were represented by a fine group of entrepreneurs with great ideas and powerful demonstrations. Networking with them and learning about their different challenges was illuminating.

Boston can be a tough place for startups. While there are many Angel groups, they often see themselves as mini VC's more interested in fund management than nurturing new companies. The OAF model seemed to be to try and find actual high net worth "angels" who are checkbook-ready.

I would say about half of the attendees fit that description. The other half were angel group directors of members looking for deal stream. I had previously either presented to their groups or contacted them. It was discouraging to see some of them caucus with the investors instead of taking the opportunity to mingle with the entrepreneurs who took time to hone their demos, some traveling from as far as Montreal and San Francisco.

Still, there was some interest expressed for Venalytica and the other companies and you never know what networking opportunity arose as a result. Overall I would call it worthwhile and a good use of time.

Open Angel Forum

2010-06-22T06:41:00.000-07:00

The Six Companies Pitching At Open Angel Forum Boston

by Leena Rao on Jun 14, 2010

The Boston edition of Jason Calacanis’ Open Angel Forum is taking place next week in Boston and we have the six startups that will be pitching investors come June 18. Calacanis established the Open Angel Forum (OAF) recently to provide entrepreneurs and startups with free and open access to angel investors. OAF has held sessions in LA, New York, Silicon Valley and Boulder.

Below are the six startup finalists:

Textaurant’s web-based waiting list management technology allows restaurant patrons to get stuff done nearby while they wait for a table. Textaurant will alert people on a restaurant’s wait list via a text message when a table is ready.

Keenkong, which debuted at TechCrunch Disrupt a few weeks ago, helps manage the social media overload for marketers. Keenkong semantically segments the conversations taking place on Facebook and Twitter by topic (what), by intentions (why), by network size and more.

Zazuba is an appointment booking service that allows consumers to view appointment availability at local businesses in realtime.

Venalytica develops an SaaS product, Consumer Preference Analytics, that gives retailers greater insight into the way consumers find and purchase products online and in stores. The product allows consumers to indicate the strength of their preferences for product or service features resulting in a ranked list of choices on a retail or consumer research website.

Tasted Menu aims to provide a centralized, structured destination addressing two of the most pressing questions regularly faced by diners: “What’s good to eat here?” and “Where do I find the best…?”

Hello Vino’s mobile apps give consumers custom wine recommendations on the go. Since June of 2009, the app has made over 5 million recommendations.