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Here's another excellent Deloitte TVC "Legends" session, put together by Ellen Mundell, with Doug Humphrey, the founder of Digex, Cidera and Colocation. Doug tells it like it is, with a refreshing perspective on his experiences taking Digex public in the late 90's.
Here is a transcription of the event:
Legends Series: Doug Humphrey, founder of Digex, Cidera & Colocation
Dated: September 22, 2009
(3:22) For those of you who don't know me, I'm Chuck Carr. I'm a partner at Deloitte; I lead our, what we call our, early stage drug practice in the greater Washington area. On behalf of Deloitte and all our Tech Metrocenter sponsors, we want to welcome you all here this morning. This kicks off our fall season of the Technology Venture Center. We're very fortunate to the kickoff the Legend with Doug Humphrey. Basically what we do for these types of events is it's very open-ended; it's a lot of Q and A; Doug will speak a little bit about the companies he's been involved with back in the late 90s, and those of you who were in the area, I'm sure know Doug. He was quite visible during that timeframe. He went into hiding a little bit here.
I retired, but I'm done with that now.
He's back. And, sort of kicking off being back, I guess, we are so fortunate to have Dough here, and...I'll turn it over to Doug now.
Ok. I see ex-business partners here! ... you know who that is. Well, thank you very much. I will refer to notes occasionally so I don't get too far off track...Everyone turn off your phones, etc. and I will try to remember to tell you to turn them back on when this is all over because that's the problem with turning your phones off; you'll be wandering around saying "god, everything must be going great. No one's calling me." And then you're like, "oohhh, nooo!" and you turn on your phone and you can't believe. I turned on my phone one day, and somebody said, "how's it going?" and I said "we'll find out!" And I turned it on...and it went BLEEP every time a text message came in, and it sits there and starts dancing around on the table. BLEEP BLEEP BLEEP BLEEP BLEEP. And, I was like "Oh no." Anything more than, like, eight bleeps and the day's done. So, thanks to Deloitte, which is, congratulations on being a survivor. I had to check yesterday, on a conference call, what is it, a big what now, and they were like: four. I said, "ok, good." When I retired I think it was between like five or six wasn't sure; I remember the phrase "Big Eight" when it wasn't a college.
[laughs] You guys remember that? Anyone here old enough to remember that? Yeah, thank you. You make me feel better. And, then Cooley Godward [Kronish LLP], who is my favorite law firm. I think my law firm...I'm nominating Carl Grant [Sr. VP of Business Development] as the majority whip [laughs] because, I mean, none of you guys would be here if it wasn't for the fact that:" ah, I can't, I've got to get up early or else I'll piss Carl off." So, Mr. Grant knows how to whip 'em and drive 'em, so we're very happy for him. And, I did see Corbus down there and my old friend Esther Smith...So, I was told past/present/future or something like that. Every story has an arc. So, I'm going to keep it very simple. My story arc. Dry erase marker; important. I will say this. Immediately, I'm off to a long story. Past. Present. Future. I gotta start thinking. I'm thinking story arc, like on a TV show or something like that, a story arc has a start and an end at a stable point. But, nope. As we know in our industry, I'm a start-up guy, a serial entrepreneur, God help me!, that's what I am. And in my world,I have to get back to this mindset,in my world, everything goes up, so whether that's totally true or not, we'll see. Let's see, very early (I have note that says 'very early'), in junior high school I started a company, which was doing model rocket transmitter, tracking transmitters out of G. Harry Stine's The Handbook of Model Rocketry, which was copyrighted in 1950-something.
And, I had my first, it was very educational, because there was a schematic...and I thought: I can do this. I made them, and they didn't work. The schematic was wrong. So I was like "screwed by the engineering department again!" Well, not again, but for the first time, but not the last time! And, so I had to actually then learn what the damn circuit did. And, then, you know, so it was no problem, I figured it out...the value of this was...it was going to work better. And then I sold like three of them. I ran it one on EBay, I don't know, about five years ago,...transmitter or something like that, PI....Corporate, which wasn't even a corporate. They just put it on there because it sounded right. And it was this thing, I went "oh I have to buy this" and so I bought back my own transmitter. [laughs] I did, for more than I probably made on all the transmitters that I owned. But it was in junior high school, so it's ok. So, I have that safely ensconced away so that after I die, my kids will go: "what's this piece of crap?" and throw it away. [laughs] I was at a yard sale,this is so sad,some old guy all his hand...tubes and stuff, and I mean they were going to trash them. Literally, it was this huge box that was going to go in the dumpster. So I walked up and said "what, I'll give you $20 for it," and I send them as Christmas presents to all my friends. Lasers and high energy physics... I send them as Christmas presents to all my friends, and I remember senior year I had old physicists crying...[laughs] There's no profit there. So, let's see: past, present, and future.
The past, eh, starting companies wasn't my first startup; my grandmother gave me hell when I was a little kid--I was living in Georgia, so I must have been a really little kid,maybe 1st grade, they bought me this big package of assorted cracker packets. You know, it's like 12 different kinds of crackers. And, so I immediately opened up a little stand on the porch and started selling them. I got yelled at for that. That was probably my first entrepreneurial experience. In '92,'90-'91 I was at a company called Candum Computers, a big, full power matrix systems, and we had a nice clientel: NY Stock Exchange, all sorts of people at NASDAC, and it gave me an appreciation for something that has served me forever, which is no single point of failure, fault..., critical engineering, and everything I ever do in the end comes down to that because there are only 193 people on the entire planet that have that clue; that clue is preserved, conserved, there are no more being made. When one does, a new one isn't like it. It's like Buffy the Vampire Slayer or something. And what you get is, most people think they understand, but most people have no freaking idea. And so there are only a certain number of people who seem to 'grock,' and you do, actually. So, after...is one of my partners here and a million square foot collocation facilities. It's kind of a weird thing, but it's served me well. In '92, I started an Internet Service Provider called Digex. It was way early, so we were driving around putting flyers under windshield wipers saying there's this thing called an Intranet and you need to be on it. It was way pre the World Wide Web or any of that. And, it was started really because I saw my kind of peer group was people who graduated from college. In college 75% of--they were on the Arbornet slash early, early Internet. And 75% of their social lives was over the net; I mean, email and you know...email was the killer app. Email today, right now, it's still the killer app. Everybody goes: "Oh, what's the next killer app?" It's like, it's email! You know, I mean, the second killer app kind of changes and moves around. It's not Twitter, it's email. People Twitter about things that don't matter.
You know, people still email about things that do matter. But, um, I notice that all my friends would get out of school and go "aaaah" because they couldn't get Internet access. It's just the end of the world for them. So, we were like "huh." So I got an old Sun...360, 18...base machine; a couple friends of mine, like Bob Stratten, a guy name Rob Seastrom, help me config it up. It was running on Fujitsu Eagles; I don't know if anyone remembers 470 meg, 470 pound, 470 amp, 470 kilowatt heat Fujitsu Eagles sitting on a carpet in my townhouse. When we sold that townhouse, there were two Fujitsu Eagle shaped indentions in the carpet [laughs], and where the heat, since it's sort of, you know, a poly-whatever carpet,if it were wool I'm sure we would have been ok, but then the place would have smelled like lanolin [laughs],but truly, it had the combination of...and the heat had change the...of the carpet, and no amount of physical work was going to get this done. One day I walked somebody through, and they were looking at it and said "what the hell's that?" and I said "Take a guess. I used to have a ... " he said "Fuji Eagles!" and I said "oh my god, you're one of us!" [laughs] Shoot yourself now. But anyway, so, I walked into a party and said, "who needs an email account?" we were CUUP-feed. We weren't even on the Internet, it was still T-1 lines. So that was the bottom line. That was early '92, '93, in '94, I think, I was out raising venture capital and a thing to note, raising VC in '94 was like crawling over broken glass, this was tough. I mean, no one has an official number: 40, 45 presentations. We started that and found a boutique firm, Armada Partners, which was Bob Stewart and George Rich. They put a little bit of seed money in. My law firm at the time was Reed Smith Shaw McClay, which is a great law firm, don't get me wrong, but not a venture firm. And that's my talk that I give at Mike Lincoln's UVA Law School thing all the time: get yourself a venture firm, a firm that knows venture if you want to do ventures, because if you get a litigating firm to do your venture deal, [inhale] it gets a little litigious, and then you don't want to be there. But, they were very sharp people and very good. So, literally, we went to Boston, so I could blow up all the VC in Boston and make...because every time I did our pitch we'd get destroyed, absolutely shredded. There are some other phrases I'd use, but I'll be polite here.
And, if you've ever read Mike Lewis's A Liar's Poker, you'll know some of the phrases in there that I really do like. He doesn't like the French for example. I'd go to a meeting and get destroyed, but the cool thing was my two guys from Armada, and this is the important thing, when you go get yourself a boutique consulting firm, whatever, to help you with this, and you're doing your pitch, if they're in the room watching you give the pitch, fire them immediately; bullet to the back of the head. Gone. No discussion. That's not their job. But if they're sitting at the table, one on each side, watching the people you're pitching to and making notes, they should know your pitch by now for God's sake, they can give your pitch in their sleep, in your sleep to [laughs]. I mean, believe me, if you get this close with people, it's sort of a wife-husband relationship, but much closer, you know what I mean? [laughs] None of the benefits from any distance at all. But truthfully, they need to be watching from the other side of the table and taking notes because when you say something, they need to know who liked it, did it work, did it not. Read the body language. Read it. See how it goes. And you need to be tuning this with your pitch. It's back to the hotel to rewrite the pitch. We do a pitch, and ok, back to the hotel, rewrite the pitch: boom, boom, boom. 'Harry McCants' old...guy at Blalock in Boston. The word "autopsy" is almost correct here...to me. I mean, my spirit was in the corner of the room, watching myself get torn into little pieces and admiring the skill with which I was getting torn into little pieces. And at the very end, as we were leaving, he walked up to me, shook my hand, and said, "Listen, nothing personal on that; just thought you needed some...." I said, "I cannot thank you enough." And, when I got funding from...and Grotech and Massey Burch, when I closed my round, I sent him a bottle of champagne, and I said, "Of all of the pain I suffered, yours was the best." [laughs] I know he understood; I know he got that. I completely know he got that. So, we went up to Boston pitched all over the place. Got blown up, crashed and burned. Boom boom boom. And, they came back to where we wanted to score because the truth is a VC wanted to do a local deal. You really don't want to be far, far away. They want to be able to come stand on your desk or you to come stand on their desk with their questions, whatever.
Distant VCs tend to follow, which a lead VC tends to want to become a local. I think that hasn't changed. This is a good point here. I've been Rip Van Winkle at it for six, seven, eight years,I don't even know, I'm afraid to really figure it out,so there's this hole in here, and what I am doing is trying to fill that hole. And trying to truly get my situational awareness up; that's why I'm meeting with everyone I know. You'll say, "what are you going to do?" I'll say "I have no idea." I mean, right now, you know, from there to there, what field are you going to be in, I don't know. What kind of position are you looking for? I don't know, you know. I mean, even I don't know, I don't know. So, by the end of the year, maybe I'll have some of this filled in. I don't know. But I can say that the VC world has changed a lot. Now I remember it, though, before it was easy money, before the go-go days. So I do recognize a lot of it, I'm not just wandering in saying "holy shit, where're the VCs? Oh my god!" I'm sort of like going "hmmmm, in 1994...a little bit, but worse." So, that's where we are. So, we IPO-ed in 1997. That worked out pretty well, and in fact, we offered to sell the company to Verizon, back when they were Bell Atlantic for $50million, way back when, and they were like, "what are you talking about? Internet? Huh? What? What's that?" I mean, it was really hilarious. They had no clue. And, if you go to digex.net now, it will push you over to a Verizon website because Digex went public, they went private with a company called...who got bought by MCI, no got bought by WorldCom,remember Bernie? He's still in prison, isn't he?. [laughs]...and, they bought by MCI, then MCI got bought by Verizon.
Or close, I don't even keep track of them all. 1998, a company called SkyCache, and this is an interesting thing: the lesson with SkyCache is when you take venture capital money,I get this a lot, people say do you want it,when you take VC money, you're getting on a train that's on a set of rails. That's going to happen. You are limited your options, choice, etc; you are also opening up a gigantic world. I'll tell you my Reed Smith story. I go to sign on the deal for Digex, the first $6million, right? $2million from Grotech, $2million from 'Benrock,' $2million from Massey Burch. By the way, that sounds like a strangely pity deal, but that was a standard deal back in '94. that was a fuckin' lot of money, pardon me. Especially when I already had like $3million of it spent already. My God that was a lot of money. No seriously, back then, a $15million fund was a good sized fund; $100million fund was a big fund. Ok, and besides, the first two they're putting in is a commitment; there's another 2, 3, even 4 million...There's another...behind that too. On their books, they're budgeting that out. So, truly when you're getting a $6million deal, they're $18million in the universe somewhere that's kind of getting earmarked over into your direction. So, that's big. And, we go to the final bing, and my lawyer says to me, who's a litigator, says "you can't sign this deal." It's a horror show; I mean, I'm locked up personally forever, oh it's just terrible, non compete...It's fine, though. You can't sign this because you're getting screwed. So, we went into a little room and she repeated it, and I said "you're not getting this. I'm here to be screwed. I want to be screwed. That's why I'm here. I'm getting screwed." And what do you think is happening to the guys who are putting $6million down on the other end of the conference table?
You think any of that is ever going to be seen, ever again? Gone, baby, gone! Half of it's already gone. [laughs] I mean, I just scheduled to get married a month after our close. And at the close, just before the close, they were negotiating: how much of a salary do you want? I mean, we had nothing. And, I said, "I don't know, $120?, whatever, I don't know." And, they said, "yeah, ok, that's reasonable." And I said, "ah, request from my wife: I have a little problem. I've got a wedding to pay for. My own in about a month. We've got like $5 in savings." And to their, to Frank's credit, they got up and said "why don't we just make your pay retroactive to Jan 1." I said: "thank you." So, there's a certain magic to the big-money world, you know. I went home and said, "honey, the wedding's paid for, and I'm employed." And she said, "ehhh." [laughs] 'Cause out of college, she had made a thing that said: "I'm not too picky, but in order to date somebody, they have to be employed." She made an exception in my case. [laughs] Um, the Digex lesson there was, this is not a normal transaction. You can't cover your ass, I mean, this is a big leap into the void, but the good new is that someone is giving you their parachute to leap in the void, so that's quid pro quo. SkyCache...a satellite company in '98. What I was saying about getting on the rails; interesting lesson: on the napkin, and this time we actually wrote it out on a napkin because we knew that everyone was always talking about writing the business plan out on a napkin, so we actually jokingly by a guy who was going to do marketing, Greg Money,..."whoa, whoa, you're going to write some shit on here, on a napkin? God, you're already looking forward to the 'here's a picture of the actual napkin.'" I said, "man you're looking forward." And that's what...I mean, he was good at that: marketing, discussions. We said, listen, what we're going to do is the cutting edge internet, R and D that all the satellite companies are too slow; they're all too stodgy. They're like networking x25. We're like, no, Internet world! So, we did all that work, but we figured we're going to do this, do this, do that.
We'll sell it out for like $50million 'cause we'll sell it to the logical buyer, which will be one of a satellite companies. They're going to look at it and go, "damn, you've done all the R and D that we didn't even know we needed to do, but now that we look at what you've done, you know, wow, that's really great!" And, we did, except we didn't because we had taken a VC partner and, there you go, we had taken a VC partner and they were just one of say...a very good one, they owned a piece. You know, what happened was, it went...when the Orion guys showed up [names] all walked in, and we showed them what we were doing, and they looked at me in the conference room and said, "wow, you guys have done all the research work, dadadadada." I mean it completely repeated my preamble to my [illegible noise], and I was like, "God, you haven't even seen the business. This is great!" And, they said, "look, we'll give you $50million for your company right now." Which is exactly the number we were talking, and it was exactly $2million for each person in the company. Now, we had a VC involved, etc., etc, but I was pretty sure I could turn to every member of the company and say, "listen, here's the deal. We're going to get bought by those guys. We're going to turn into a stodgy satellite company. You're going to hate this. But, here's suitcase for a quarter million dollars. here's suitcase for three hundred thousand dollars." Boom boom boom boom boom. And, we'd make everybody feel good. Well, except, once you got the VC in there, it's not your decision. And, the VC said, "wow, if they're willing to pay $50million for it right now, think about how big this is going to be when we IPO." So, that didn't end up working out. But, you know you're in trouble,the only other anecdote would be-- you know you're in trouble when in your D round, the Bank of Kuwait calls you and says, "we need to be in your deal. Whatever it is. Whoever you are." and sends a representative. I didn't even meet with him; I, by then, in both of my companies, I replaced myself with another CEO to go public. And in this case, we had reds, boxes of red herrings to use as kindle wood. End of the market. But, literally the Bank of Kuwait showed up, didn't understand what we did, and gave us $3million or so to be in the D round. And, even sent up, I remember Rick came out of a meeting, I didn't even sit in this one, I don't consider the D round the one I raised, I just wasn't involved, but he came in and was like, "ok, random banks from the Middle East are showing up and shoving money at the deal." And I said, "what's the amount?" and he said "they told us 'whatever we wanted.'" Ah, ok. That's your sign that it's over, I just want you to know, that's your sign that it's over. It's like your cabbie giving you stock tips. You're like, "ehh. Sell everything." So, anyway, that didn't work out so well. But I did have the joy of taking over a company that was crashing and try to soft-land it for two years. And, firing 200 people in one day. And a bunch of other, so remember with the good, comes the bad. Firing 200 people in a day is...they were all really understanding. They really were. They were very nice. I was shocked. I figured I'd have to shoot three of them, but they were like, "dude, I understand. Sorry. If there's anything..." Almost all of them, a few of them just walked out, most of them came up to me and said, "listen, you know, just 'cause I'm not getting paid, doesn't mean I won't work for you, so if you need anything, you call me, and I'll do it." I do still have a cadre of about 100 people who'll drop whatever they're doing and come follow me into hell, which I'm very, very lucky to have. I tell those people, "Don't do that. You have kids now." So, I'll have to figure out some other way to do that. When'd we start Core?
'99, yes., that's what I thought. In 1999, in a totally separate direction, and this is sort of what I do. At the UVA Law School picnic, they said "what do you do?" and I said, "the best way I can tell you is I'm a synergist. I'm not the guy who invents the next formula or the next whatever." I have a physics background, which actually serves me very well, because if you understand physics, you kind of 'grock' the physics of any situation, even if it's a business situation. The physics of the situation is simply the stuff that it is and cannot change. And if you can figure that out, it's easy to figure out the rest of the situation. What I do is try to look for large forces moving in different directions and go, ok, the deal is you're a surfer, and if you want to catch the real wave, you've got to figure out where it's going to be long before it is there. If you see it happen, you're late to the game. So you need to be paddling out, and if everyone on the beach says, "you're out of your mind." well, maybe you're out of your mind. But, if everybody on the beach except one or two people you respect, everybody thinks you're out of your mind, but maybe you see a couple people not saying that, then you're probably right. And you're paddling out to where the waves can happen. Almost nothing in life happens for a single event; almost everything is a confluence of events. Almost everything is multiple events coming together. So, one day, I had a good real estate relationship with the Ezra Company, which.... And, they were my real estate guys, so whenever we would start a company, whatever, you and Mike would come on out, or your dad you know, and we would hook up and they'd find me real estate; they're real estate reps, you know. It's a nice business, a nice staid business. But I always knew these guys were entrepreneurial. They've got huge drive. So what I said was, "hey, I talk to them, they talk to me, the opportunity was in what's called collocation. So, collocation in a nutshell is where all the servers are now. The internet used to be, here's the internet tree and it has a branch and off the branch is another branch and a leaf, here's a leaf. And in the original internet model, the leaves talk to each other. There's no smarts, no storage. There's really no computers in the tree, it's just routers. And that worked for awhile, but what happens is, what happens if it's like AOL where seven million leaves are all trying to talk to AOL.
The problem is, you can see the branches get pretty thin here. If 7 million leaves here are all trying to talk, there's something...it's just easier and should go some place where there are multiple carriers like ATT, Sprint or MCI and...and where you have big bandwidth available. And where you have generators and infrastructure and everything all together. And that's what collocation basically came from. It was actually a serious shift in how the internet architecture was used....well up until now they'd all the internet colos have really been like telecolos. But telecolos were all about telephone traffic, they weren't computers...no, and orders of magnitude...energy heating and cooling...in downtown DC, a telecolo could be this room, on 20 and L Street, maybe three of these rooms. And that was it, I mean, you put a bomb there and you take out ½ the telecom in Washington DC for awhile, right? We were going to do a calendar, which was just going to be Ryder trucks of different kinds parked in front of critical infrastructure locations, and it would look to anyone who didn't know like it was a Ryder calendar, right? Here's the little truck and the big truck...but anyone in the know would be like, "Here's a Ryder truck parked in front of 55 Market Street in San Jose? Here's a Ryder truck parked in front of Pearl Street station in New York City. Here's a Ryder truck parked in front of the May East." You know, we thought it would be a great calendar. After 9/11 we scraped plans [laugh] 'cause suddenly there were a lot of people who would get it and would not; I will say this, I have a singular credit, a buddy of mine, at an agency/job that shall not be mentioned, faxed me a page, he said, long story short, he said it was the cover page of a report generated by people I can't talk about to people I can't talk about, I had nothing to do with it, except that several years ago I edited a picture that, Federal Express has a service called Custom Critical, which is their super duper high-end service, I used to do nuclear physics and there's a thing called Prompt Critical, and Prompt Criticality is sort of this thing that happens [snap] just before a nuclear explosion,a lot of controversy over it,, very technical but anyway, so I PhotoShop-ed the word "Prompt" over the word "Custom" right? And it was the lead cover item on a top secret report that someone had searched off the internet and put it on this report and it said "Our Biggest Fear." A Fed Ex truck marked Prompt Critical. Well, I didn't intend it to be that joke, but the guy was actually like, ok I've got to scrub all this stuff off but it's just your picture...'cause I didn't have a credit on it, so I was like, "How did you know that was my picture?" and he was like, "I can't talk about that." [laughs] ack, well, thanks a lot, I'll order pizza the next time I talk on the phone. So, what we did at Core Location was we identified these trends. We suddenly realized that if all the servers are in the middle of the internet,and we weren't the first guys, there were bigger colos, I mean you guys were seeing it, where the Ezra guys would try to find office space in some building and like "this is a rinky dink piece of crap building. Why are we paying $40/square foot for this stuff?" The answer was a telecom building. Right? So they were in on this anyway. I went...we talked it over and what we decided was to go look for big white elephant buildings, and we got million square foot buildings for really cheap and we'd go out mega-data-centers, huge things, and it worked really, really well. So we were very happy, very profitable. Carlisle Group was our partner on that; Carlisle put up a lot of money.
Morgan Stanley.
Morgan Stanley. I mean there was a whole list, but actually Carlisle gets the lion's share of the credit with all of us 'cause we were in the front taking the risk. Big risk. And then, following behind us, when they saw what was going on, Morgan Stanley and all those guys swoooshed. And it was a big industry until the crash. But we got out long before the crash so we're happy now. So that's good. So, that was Core Location. It's not really much known because truthfully it was a small team of people...there was no dilution, no PC model, it was, what that was was a collision between the internet and real estate. And this industry worked in a certain way. And it didn't understand this industry. It worked in a totally different way. And it didn't understand that industry. And truthfully if you had to boil it down, we understood both industries. I mean, that was it. You put you guys and he guys in the room, we all sat around bullshitted and talked about it, and very, very quickly, we grocked both industries. And in doing that, bingo, you identify where the wave is going to happen. In this case, you get there by buying up million square foot buildings which you can buy for a song because nobody used them anymore.
And leasing them.
And leasing them, yes. And then what you guys did. Buying them was the hard part. It's just like the VC world, you've got the fundraising, then you've gotta go do it, and in your case, you guys, they leased a million-plus square foot building up at what...months. Unbelievable. I couldn't believe it. So, the core exist was 2001. I got my numbers right. Then Cidera crashed. I did two years of trying to [groan] solve...and somewhere along the line, I got out. I said, "ok, boss. That's it. We're going to go have babies. I have a 4 year old, an 8 year old, they're fabulous, so I'm out." My eight year old is named Juniper, which is really funny. Not after the networking company; we liked the name. But I do have a dog named Cisco; and he is named after them. He's a sheltie, we call him Cisco the Router Dog. You know sheltie is the...[laugh] so he's a herding dog, but he will rout you. He's getting old now, but back then, he'd take off and try to run you in a straight line. Now everyone knows if you have herding dogs, they see anything going in a straight line, they need to catch and eat it...not for any reason. It's just DNA. So, um, the first VC was tough; then there were the go-go years. I mean, in NASA they refer to the go-go years, you know, the go-go years were great. The Golden Age of PC, I call it. Just like NASA the go-go years, I was telling...fabulous stuff, you're doing great things, but could get money. I mean the VC would stalk the halls looking to put VC...I will say that it's happened and still happened...out of VC world. You'll find the old line firms and going to make it because they have foundation, infrastructure, deep pockets, or anyone who's going to invest, who you going to trust? An EVC or ...NEA. I think you're going to turn to those guys....I think I'll invest in your fund to 12; I don't think I'll invest in this fund 1, you know? So, that's going to be a big scrub out, and it's already happened a lot but I think it's not done yet. Note that things tend to run in 10-year cycles and we're just coming up on the. Nobody in the VC world has made any money since '01. and if you pull one or four or five or eight deals, big deals, out of the equation, that was '01. so, either you reached your last fund in '00 or, well, we're coming up. And when you send your guys out in 2010 to try to raise your next funding, it's going to be very interesting to see how that's going to happen. So that'll clean up. Yeah, it was a time of excess. I bought a warship. I had two kids; they weren't excesses, they'll pay off eventually...yeah, we should take everybody out for a ride. I'll send you the website 'cause it's up for lease or for sale, people kept calling and contacting me saying, "we want to lease your warship, we want to go fight pirates." The whole piracy thing? It's ready to go, I mean, it's the only...stamp ready to go, armed up, warship, ready to go, just turn on the engines, and go, 50 caliber machine guns...30 side arms, she still has all of her armor plating, the whole nine yards, and except for the hottub that replaced the front gun now.
But it doesn't look like it with the covers on...I got an email, there's photos on the web, from a guy who served on it for like 8 years. It's an old British navy boat, and he sent me an email, he's like, "these are a blast. The picture in the buggies, OMG, 'cause it's got buggies, you know strollers...storage for two 50-caliber machine guns, a thousand rounds of ammo, four strollers." So, we're set, we're all good....Everyone wants to lease this thing, sail it halfway around the world, where it will cost a half-million dollars to get it back, and you'll run it into a war zone where there's no insurance. No. cash in the barrel-head or go away. I mean, if you really want it, that's how much it is, write the check. And if you can't write the check, call me when you can 'cause there's just no way. Ok, me? Ok, now we're to the present. Retirement. Me and retirement, not so good. I've been on the beach for a long time; I love everyone I'm on the beach with. A friend of mine called me looking for a job; you getting divorced? Nooooo. Stop that right now. My kids are great; my wife is great; my daughters are great; I have a great life. We're just on the beach, that's all. So, me and retirement, not too good. My eight year old is into horsies now, so daddy has to go get a new job because we all know about horses. Uuugh my god. Also, the economy is also in a weird place. But also, let's look at this ramp thing. What entrepreneur truly worth his salt; I mean, what you always look for is the knee in the curve, and this is for everything in life. Linear things are not interesting. If you put one dollar in and you get two dollars out; if you put a hundred dollars in and two hundred dollars out, not interested. I mean, interested in doubling your money, but you know what I'm saying. Not that interesting. Why is this not that interesting? 'cause if you know that, everybody else knows it. Secret knowledge is what makes it worth doing. Linear things, everyone knows about linear things. Stock market performance: a dollar in a dollar out. Terrific. I know, nobody here lots any money, I know. I know...I think the key is, what you're looking for, is the knee in the curve where things are not linear.
You put a dollar in, you get two bucks out; you put $10 in, you get $30 out; you put $100 in, you get $1,000 out. And that's what the VC look for; it's what anyone looks for. That's what you look for at the Stop-n-Save. That's what you look for at the car dealership. Why do you not go shopping for your BMW three days into the quarter? Because they've got quarterly numbers. 'cause there's no knee in the curve, baby, it's all linear. 20 minutes before midnight, you know, on the last day of the quarter, especially if your friend called you and told you that at whatjamagiggyBMW they're way under quota, ahh, there'll be a knee in that curve. It's where you get some leverage. So, you're always looking for this, and if you really think about it, where is the economy today? Now is the time to get in. Now, I could be completely wrong. Understand this, I am wrong many times...but I'm not. So, now's the time. So, the present is, I'm looking around to see what's going on, what I want to do, and I don't know, I mean, someone said "do you want to do a Bears startup?" and I'm looking at some of those; I mean, maybe, you know. I'm talking to professors who are doing things, and that's the bear-est of the bear. That's called get your suit on and suck it up for money. You know, that's the bear-est of the bear. There's also some things you'll see in here like companies that need their second CEO. To quote Jimi Hendrix, "I have tire tracks all up and down my back." So, if you see knife handles sticking out, I know the names and I know how they got there. So I'll try not to do that again. But the reality is, a company that needs its second CEO, I've replaced myself before. I'd like to be a good guy to replace somebody; I mean, I might be a little more gentle this time. I have a friend of mine who called me up and said "I have a 200-person division, I could put you in for your clearance now, and no one will ever hear from you again." And I said, "appealing in some ways, maybe not so much in others." So, I don't know at all the format of any thing....I've talked to some very interesting biomed, biomedtechnology people. Very interesting stuff going on. Part of this is trying to figure out where the future waves are. That has to sort of inform this. What is the future? Boomer warehousing. Everybody's going to get old; you've got to have places to stick 'em. Ok, boomer warehousing. Boomer repair. People repairing boomers. They're all going to need to get fixed before you throw them out eventually, so. Boomer disposal. Betcha not going to be able to fix 'em anymore. At Cisco, there's a phrase for products, EOL: end of life...it's like: what happened to Bob? Oh, he's EOL. Umm, that's now. If you have any suggestions. And, the future. Well, we talk about the VC guys. What are hot areas? Security stuff is hot; christ I can't talk to anybody about anything without the whole security thing popping up. But I'd like to hear from you guys. Why don't we do Q and A?
Based on what you described at the...traditional web posting, what I'm hearing in our company is that...
Well, clown computing is, in fact, the same thing. Completely the same thing. The only difference in clown computing is 1) whoever owns whatever it is, so in the colo world, you put your hardware in, you own it, you have to run it, etc. and in clown computing, someone else is putting all that gear in. I mean, you couldn't tell by looking at a colo whether that was clown computing or someone's dedicated computing. You couldn't tell by looking at it; the physical is identical. It's a question of who owns it, who manages it. Ah, clown computing, as usual with any sort of thing, clown computing will be very profitable; it's an outsourcing thing. It will be very profitable for the small/medium sized user, and if you get big enough, you'll eventually come around to where you'll want to...stuff. If you're really huge, you're paying someone else's profit and not getting that much better...but, what's happened is that there's enough management software out there now; people have done the work...to manage clown computing things because in your small organization you get the advantage of fully distributed things; you might actually get a couple of extra nines for liability and that sort of thing. So, yeah, clown computing is a great idea...it usually, it started out as Yahoo! and all those other guys, who have lots of spare 'zoobs;' they've got 50,000 spare machines deployed all over the place, and 80% of the time, the machines are doing this. That they were like, "why don't we sell some of that capacity off?"
The new CIO for...CIO and CTO are really high on this?
Yeah, and they may be really high too, but that's a different...to give you an example, I mean, this is, ok, key things to take away; the knee in the curve; the things that transcend just what we're talking about: there's always, everything in life is cycles, managed, not managed. You get through that, switch. Then, this, that. Those guys love clown computing because clown computing allows them to offload responsibility. The problem is the federal government always gets burned when it offloads responsibility. There used to be dedicated emergency responder networks, going back to the 60s, 70s, 80s. and then everybody realized, that from an economics perspective, your cell phone, why do we need to pay for this huge, freaking dedicated, big, heavy Motorola blah blah blah. Oh my god. Everybody got a cell phone. It's all good. But, in an emergency everybody picks up their cell phone; all of a sudden, the emergency responder cell phones don't work. So, shared infrastructure, dedicated infrastructure that's the back and forth that you see there. The government has always had dedicated infrastructure. It's very expensive. But, on the other hand, you can control your fate. Now they're going " oh wow, oh wow, we're ... bucks." Shared infrastructure, while it's fabulous until it bites you in the ass. I'm not necessarily saying it's a bad thing; I'm just saying the truth is somewhere in the mix of these things because denial of service attacks, you know, if you're really, really, really clown computing, you don't even have control over it, you're counting on Yahoo! or whoever your vendor is to not get 'swacked' in the...the first time that happens and wipes them off the face of the map and then Homeland Security or whoever the hell it is...contracted...is going "ooooh my god!" so, "we must control our destiny!" you'll hear that line.
What was your thought on the fact that iPhone, SmartPhone, GooglePhone has come out; what is your thought on the next computing device from PC ...?
What I want, the best thing, what I want is I want my iPhone to magically go 'whoop, whoop, whoop', with a bigger screen, to be all touchy, and then go 'whoop, whoop, whoop' and go back into my pocket. That's a little ways away, but if Apple came out with a smaller, Apple will do it and everyone else is in their dust. They're just totally in Apple's dust. I don't even know why anymore. It's not the Steve Jobs' reality distortion...which I've experienced and it's fabulous. [laughs] Steve Jobs. Anyone here ever met Steve or dealt with Steve? Bottom line. Bill Clinton, who I've met twice, and I mean I meet, you know, we worked together, I mean I was at a guy's party who had him there, and I was like... Ronald Reagan had an RDF, a reality distortion field. Bill Clinton's was even more powerful, was different that Reagan's, but he had an RDF. But Steve Jobs bent, is hard to describe when he's in the room. And, it didn't affect a friend of mine, Don Hopkins. And we were at this Apple roll-out event at...and Don Hopkins was like, "watch this." So he goes over to the crudités stand and gets a decorative green pepper...and Steve Jobs is in this receiving line. And I mean, he's in complete rope-off mode, and he says "hi, how are you?" and sprays a thousand miles. The RDF really isn't even turned on though. It's just like coasting. But he's like, "ah, you can't have this tie on you." He's been doing this for probably a thousand people. Don steps up; Steve goes, and Don takes the thing and goes, "earth man, give me your seed." [laughs] And Jobs' face! We all watched Steve Jobs reboot. [laughs] It crashed him, completely crashed him. He went...[laughs] you saw the little thing go...[laughs] And, then he went, he just started laughing his ass off; he grabbed Don and hugged him, shook his hand, Don moved on down the line, but it was right, I mean. He crashed. I watched Steve Jobs have to reboot. But I mean, he was a million miles away. And, but the reality distortion field...is a huge connection. I don't know what to tell you. I mean, Apple bleeds it all. Apple will be a leading edge. So, iPhones, iTunes store, the Iapps,revolutionary, completely changed everything. Caught every other cell phone manufacturer asleep, dead, buried, and they're all still trying to climb out of the grave. Ah, here's the Google, dadada, this will be free. Fuck free. Nobody wants free. Because free isn't it. I don't mind paying $0.99 for an app that works; I really don't. I'm good with that. The little slum of people who won't do it because it's $0.99, you really want them as customers anyway? I mean, are those the guys you're really trying to figure out how to get the money out of their pockets? I don't think so. Now, Steve and company, they have it right. I would guess, if they expand their touchscreen to a tablet touchscreen they'll grow continuously for another ten years...I'm not the...guy here, right? I would say that that's set and will I buy one? Will my wife buy one? Are you serious?! Absolutely. No question. If it costs a few thousand bucks? Yes.
Related to that, you talked about the boomers. And this is fast...but I see a disconnect between me and the next 30 years and my parents. We just came back from a trip and I wanted to email my mother some pictures. My mother is 89. She cannot figure out...
Get her a Mac. Get her a Mac. Her biggest problem is that she's sitting in front of a PC. And I'm not trying to be a ...here, I'm not kidding. My mom, who recently passed away, I bought my mom a Mac, and she was online. I mean, she was truly, even at the end of her days, did not have a huge appreciation for what was going on under the covers, but she was emailing. I asked her, you know what I did, I got her a Mac and this will sound very weird. I got her a Mac, and I got her an AOL account. Took care of everything. I never had to do...the only time I had to a little support call was literally when the phone line wasn't working or something.
I guess what I'm asking, though, is actually a little bit bigger question, though, which is: it seems to me that there's a fairly big market who people haven't, you know, bought an iPhone because it's just, kinda, too hard.
Well, ahhh, right. And, you know what? Those people will be solved by time. [laughs] EOL. Didn't we discuss EOL? That's...problem. I'm not trying to make...a friend of mine, a friend of mine, we were talking about racism, bigotry. And, look, my grandmother was racist, you know. She grew up in the South; that was her world. And, you cannot judge the past by the standards of today. I mean, you can judge it a little bit, but you've gotta, without the context, the data doesn't make sense. In the context of when she grew up, was the context of when she grew up. She wasn't a bad person, but those were her views. Am I going to get into it with her and try to change her views? Do I need to beat this into my grandmother's head? No. she was smart enough to know; she never said it in public; she never said it to anybody. She maintained politeness; she was a Southern woman. I knew what she thought. It's ok; I didn't think it. Some things get solved with time. Technology uptake, you know to add documents? print them out. On what paper? ...the feel of paper. So, the paperless office, it's just the funniest concept in the whole world to me. I have this shredder, I mean an Oliver North signature model, turns it into dust. This shredder I got at NSA at an auction. Only pushed hard for a few years. Only shredded on Sundays for the...agency or something. But, if I'm editing a real document, I print it...I edit it up. I work on it. Somewhere along the line I go back; I change a version number; I put my edits in. I don't do it online. I've got a $2,000 laptop; it's more powerful than all the computers in the world 25 years ago all combined, right? I edit on paper 'cause I can see it. Just works for me better. But, I'm not trying to say that that's bad or good, but I'm doubting that I'll be editing not on paper on my deathbed, you know what I mean?; it's sort of, it's my MO. It's the way I work.
Right. Where I was headed, actually, was thinking of all this biomed stuff and the degree to which if we change the healthcare system...
Oh, yeah! That's going to be huge! Ok, ok, I'm type 2 diabetic, right? Although that's weird because I've changed my diet and I'm not anymore, but the underlying lack of basal substance is still there, right? So. If I go in there and chew down a whole, all sorts of carby things, then I'll get my blood sugar level up. But the point is you know I test, I have a little thing, I go boom, I bleed, you know. Right now if I squeeze my finger, I just bleed. A friend of mine tests himself in the middle of his hand; I'm like, "dude, it's like stigmata! What are you doing?" 'cause one day he poked himself, first off, that's like the most, I'm like, you're a masochist, right? You're a ... there's just no question. Because, dude, you like pain far too much. That's gotta be the worst place to hit yourself, and he hits himself right there. And one day, it didn't just close up automatically, so he's doing work on stuff and leaving little bloody, bloddy prints everywhere. I grabbed his hand, turned it over, and...stigmata...no, no, ok. You're ok. But, um, all of this is arcane. I've got an iPhone right there, what do I do? I test myself and I send myself an email with my iPhone that says BG whatever it is in the subject line. And then my mail system takes it out and sorts it and shoves it...it's all good. Ok, wait a minute. There's something wrong with that. This is, like, way back when, when a buddy of mine got a Motorola pager and two Motorola cell phones. He got paged by the Motorola pager, look at the phone number, pull out the Motorola cell phone [laughs], and call. Tell me there isn't somebody who hasn't thought of the idea that you should be able to go...hi, Bob, you know? So so protocol. I'll give a medical device history that will blow you away. A friend of mine is at the highest, highest, highest, highest, highest, highest level as a contractor, but I mean, highest policy levels of National Security Agency. She really is.
Having lunch with her...two people standing by the front door at the restaurant...just hanging out....so I had lunch with her the other day. She just had a spine implant done, and she showed it to me the other day...and, um, it's literally a spinal stimulator. It's a row of three by 24 electrode diode thingies and it's implanted in her spine now. I said, "Oh, TSA is going to love you!" and, then we're talking, I said, "oh, you have another problem, what does the office of security at the fort think about this?" And she said, "yeah, didn't have much..." I mean, this has a wireless remote control. No, but she's walking in the spaces at NSA, skiffs...it's like, this thing logs data. You know, when she goes to the doctor, he goes booop and wirelessly downloads stuff from her! She's bionic! I said, "do they have a policy on that?" and she said, "nobody in the entire community has a policy on this." She said, "this has caused, like, waves of trouble throughout the intelligence community." Because, who would have ever thought about this? I mean, you're not supposed to walk in there with a wrist watch, and she's walking in with a wireless data-logging system that's got an...[laughs] I mean, I'm like, you better be careful, someone's going to walk up to you and they're going to, like, Bluetooth and exploit and something like...excuse me...[laughs]...exploit your spine, you know? And, she's like, "that's what they're scared of." Medtronic, that's it, Medtronic. Thanks. I'm just like, "holy shit!" so guess what?...but as everyone gets older, that's the thing to look for. The confluence of events. What is, what will all the, I mean, this is just selling, it's just marketing. What will all these people need as various markets collide? Health care, I mean, I won't go into details, but, I mean, you know, this is a looming disaster that is so big that actually no one will actually, everyone is just diverting the days...ok. And, the only way to solve it is not policy, it's not denial of care, or this or that, it's not beating the 20 or 30%, even if you, ok, even if you got beat 20% profits and 30% in efficiency out of the whole system and cut the costs in half, we are screwed, I mean, we aren't just sort of screwed. We are completely screwed. The only way to solve this is with technology. The only way to solve this is that instead of it being a wrist watch, here that I have, that when I get to be 65 or 50 or whatever the hell it is, I put on the Metronic blahblahblah wrist watch. And the blahblah wrist watch would...allow me to do anything, report my blood sucrose, reports my blood sugar, my blood pressure, and does this and does that, and monitors a zillion things so that without any effort, ie any cost, there's ...eye running somewhere that looks this whole thing over and goes: hey, unit number 7763, I don't know, I am not a man, I am a number...has this problem and we have to take a look and they solve this thing easy because the only other alternative is that three-quarters of us get hit by a bus so the only thing the system has to do is pay out $3000 for burial. But if every single person in the, all of us, everyone in this room, expects someone to spend $3million to get your butt to live six months more at the end of every single life, the math doesn't work. The good news is we're the people who are going to solve the problem. So, other than that, you're question is not interesting. [laughs]
One last question.
One more, one more. Come on guys, come on. But not you Dennis...financial guys. They aren't going to talk to you anymore. Yes.
Just to fill the last question: a guy who was a Chief Information Security Officer at Intuit, and he says 10% of the computers in the US have been botted by guys who will download stuff so they can use it. And he said the only good news is 5%, 10% of the bots here are in this bot herd, and 10% are in this bot herd, and once you're in a bot herd they will make sure you don't get other viruses.
Oh yes, each bot herd had very good internet security. Yeah, absolutely.
The fear he has, of course, is that these are being orchestrated by foreign governments and...
Well, they're being orchestrated by whoever can write the check, but yeah, yeah.
So, the point being that stopping that is actually a critical thing to the United States.
You can completely blame Microsoft for this.
So, fixing it, is that an area of interest? That's the question.
It's an area of huge interest. Gigantic. The problem with it is, um, we have now, we have what's called the curse of the installed base. All of us have this problem. As a service provider, look at Microsoft right now. What is it, Microsoft, the browser, for whatever, it's one of old or seven ... I'm a Mac guy. I tell people I know nothing about Microsoft. And that way I don't have to fix their computers. Um, do you know something about...the bottom line is once you let a piece of software out there, it's out there. And, to your point, now you got your mom. What's going to happen when you've got your mom working on something and it turns out she gets owned by a bot 'cause it's an old version of whatever, and she doesn't know how to update her security things, and lalalala. Well, we're going to get mom to upgrade the software? You're out of your mind. You can't get us to upgrade the software. Mom's not upgrading the software. Enterprises solve this by getting an iron fist on the machine. I'm just saying, look you use it, you're not running it, you're not controlling it. There are certain downsides to this, but it's not...example: a buddy of mine works for a data security company. This is good. He lives down here...he had to explain this to me 'cause I'm not a Windows guy but I am a crypto guy sort of. I quickly got it once he got to the crypto part. All the stuff on his PC is encrypted, and it's all encrypted to registry serial numbers of his machine. Someone at headquarters, and his machine is part of the local network of their machines, someone at headquarters in an upgrade shifted their system over from all the machines control their own keys to their crypto off the registry to their crypto off the...all this makes sense except when they pushed the button, it then erased the keys from all the local registries never to...again. But now replacing them with the keys from this central registry, which of course don't work, now he said any new work he does is encrypted under the new keys. And he has sent them his old harddrive with a note that says "Everything I've ever done for you [laughs] is on this harddrive. There are various data places and various agencies that might bust it for you, although I would note that corporately you opted for very strong encryption. So here's a harddrive. Have a nice day." So, there was a little bit of trouble. And management in Toronto said, "well can't we just undo that?" ... so that does happen. Uum, you've got a point, systemic problems, when Microsoft first puts stuff out, they tore all the security out of the baseline stuff because the theory was it's a personal computer, it doesn't even allow for multi-level, multi-user security. When something comes into my map, it tries to do something nefarious, the first thing that happens is that I get asked for the root password. Well, if I don't like what's going on, I type in the password, and guess what, nothing happens. So, that isn't an option on any of your older Microsoft operating systems, they all...boom, someone's telling me to do something, I should do it. It's not multi-level security stuff. Now, the new ones do, and if Microsoft could push a button; they'd pay a million bucks for a PC if they could push a button and make the past go away, know they'd do that. You know they'd...billions of dollars for the...but they can't...
Just a simple question for a crypto-expert, super techno...
Oh no.
Do you shop online?
Oh, all the time! All the time! All the time, for sure! I bought my boat on the...server. I will say this, but I have a separate credit card. I have, like, four Visa cards, and they are dedicated to different things, and I have one of them that's my online card, so that not when,not if, rather--but when random charges start showing up, I'll...the damn thing, which they do once in a blue moon. They're not even panicking my other card, and every once in a while I will cancel that card. I mean, literally, I, if anything's funny I call the credit card company and say, "those two charges look bad." And they go, "ok." And I say, "turn it off and send me a new card." I literally, I can't even remember, but I get my bill and I go, "Amazon. Yeah, they have my thing. And these guys, eh, I'll go change my card." And trust me if someone tries to buy something, they will tell me. They're gonna..."We feel unloved." But I do have it on a separate
I spoke on the American Marketing Association's Social Media panel on July 15th. The video is above. Below is the original marketing information for the panel:
Innovation & Technology , How it affects the Marketing Mix
Date: Wednesday, July 15, 2009
I spoke on the American Marketing Association's Social Media panel on July 15th. The video is above. Below is the original marketing information for the panel: Innovation & Technology , How it affects the Marketing Mix Date: Wednesday, July 15, 2009 Time: 6:00 PM - 8:00 PM Location: John Hopkins University Krieger School of Arts and Sciences Washington, DC Center 1717 Massachusetts Ave., NW Room BOB Washington, DC 20036 Cost: $40 Members & Students $60 Non-members Hors d'oeuvres included. All onsite registrants are subject to an additional $10 surcharge. Register Pre-registration closes at 5:00 PM on Monday, July 13th. Speakers: Aaron Brazell, CEO, Emmense Technologies, Founder, Technosailor.com Gray Brooks, New Media Ombudsman, Obama for America Shana Glickfield, Communications Consultant, Founder, DC Concierge Daniel Ruben Odio-Paez, COO, PointAbout, Co-Founder, DC Moblile Mondays Patricia Mejia, VP Marketing, Siteworx Moderator: Maurisa Turner Potts, Expert Marketing Consultant Every day a new social marketing outreach tool is introduced to the marketplace. Rapid innovation in technology has added new weapons to a marketer's toolbox. Both clients and companies are looking for the next new hot thing to differentiate their product or service. Facebook, Smartphones, Iphone Apps, Twitter, and U Stream are every day household names. New companies and industries have been formed to spread messages about products and services. Yet, a key question remains: How does innovation and technology affect the marketing mix? Come join five expert panelists on July 15, 2009 to discuss key innovations in technology that directly impact marketers. Aaron Brazell is a social media strategist and implementer. As a long time entrepreneur and technologist, he is most known for his blog, Technosailor.com - the most widely read business and technology blog in the Baltimore/Washington region. Gray Brooks helped pioneer the political New Media space. In early 2003 Brooks drove to Vermont, helping the Internet team power Gov. Howard Dean's presidential bid. In January 2007, Brooks joined Barack Obama's campaign. As New Media Ombudsman, he was the special projects manager for the New Media Director and helped integrate the department into the campaign at large. Over the two years of the campaign and presidential transition, Brooks managed efforts integrating web design, online video, email, text messaging, online advertising, social networks, and fundraising. Patricia Mejia is the Vice President of Marketing for Siteworx, Inc. Patricia offers a diverse background in public, private and non-profit organizations, having served most recently as VP of Marketing & Communications at IXI T Corporation. Prior to IXI, Patricia held leadership positions at Freddie Mac, the Mortgage Bankers Association and the Southeastern Universities Research Association. Daniel Odio is a co-founder of PointAbout, a company that is focused on unlocking innovation in the mobile space. Previously, Daniel was the founder of Cardea Commercial Real Estate Advsors and DROdio Real Estate, Inc, a resdental real estate brockerage. Daniel has been featured on CNN, CNBC, TLC, The Wall Street Journal and many other publications for his innovative use of technology in the real estate market. Shana Glickfield, an independent communications consultant, was previously the Director of Strategic Communications at Amplify Public Affairs. Shana is currently leading a workshop series to improve how Hill staffers use social media tools in the course of their jobs. She is the founder and author of renowned local blog, The DC Concierge and is one of the top 100 Twitters in DC. Maurisa is an accomplished marketing professional with more than 14 years of professional marketing experience. Her background includes developing innovative and customized marketing strategies, communication roll-outs, event planning, public relations, and partnership development. She has experience in a variety of areas such as economic development, hospitality, technology, telecommunications, accounting, retail and legal services. After spending a majority of her career working in corporate America, she launched her own marketing/public relations consulting business offering freshly tailored marketing solutions exclusively to small businesses, boutiques, entrepreneurs and other private entities. She serves on the Board for the Greater Washington Fashion Chamber of Commerce. She is also a member of Success in the City Professional Women Organization, Washington Women in Public Relations, and a Social Committee Member for the Virginia Tech Alumni Association (National Capital Region). Here's a transcription of the event: Subject: American Marketing Association's Social Media Panel Date: July 15, 2009 Location; Johns Hopkins University Speakers: Aaron Brazell, CEO, Emmense Technologies, Founder, Techosailor.com Gray Brooks, New Media Ombudsman, Obama for America Shana Glickfield, Communications Consultant, Founder, DC Concierge Patricia Mejia, VP Marketing, Siteworx Daniel Ruben Odio-Paez, COO, PointAbout, Co-Founder, DC Mobile Mondays Moderator: Maurisa Turner Potts, Expert Marketing Consultant Legend - Panel Members and Moderator AB - Aaron Brazell GB - Gray Brooks SG - Shana Glickfield PM - Patricia Mejia DO - Daniel Ruben Odio-Paez MT - Maurisa Turner Karen: So, I wanted to just make a couple of announcements, and then I'm going to turn the mike over to our Chapter President, Brendan Hurley. We've a few upcoming events, and I hope you like this space, because we're going to be meeting here a lot for the speaker series. So coming up on July 28th, we have a networking series that's gonna be with José Andrés, who is from THINKfoodGROUP. How many people have been to the Zaytinya, the Jaleo? Great restaurants. So that's going to be on Tuesday, July 28th, that's a lunchtime event. Am I correct? [Yeah.] Good. So on August the 12th, we'll be back here at Johns Hopkins, and the table speaker series on the 12th is on Sports Marketing. So if you are interested in sports and marketing, I hope to see you and see your smiling face on August the 12th. I put the time as 6[:00] to 8[:00] because I know D.C.; I know traffic. We're going to start at 6:30 every month, the speaker series, but I wanted us to have enough time to network, exchange business cards, and get to know each other. But anyway, I'm going to turn it over to our new Chapter President, Mr. Brendan Hurley, who's going to talk a little bit about the chapter, and we'll be starting in 5 minutes. Thanks. [...] You're welcome. Brendan Hurley: Thank you, Karen, and welcome everyone. Again, my name is Brendan Hurley. I'm the new Chapter President for the American Marketing Association here in DC, so I'm very honored to hold that title and to be here tonight, and to welcome you. I'd like to thank and welcome all of our speakers. Thank you very much for your time, and your insights, and your expert knowledge. I'm sure that our guests are going to learn quite a bit from you, so we appreciate that. For those of you who are not aware--we just began our new fiscal year. The Chapter begins the fiscal year on July 1st, so I just want to take this opportunity to tell you a little bit about what our goals and expectations are for the new year. All we wanted to, really as a chapter, we want to focus on our core competency this week--move forward to try to provide maximum member value, so we are really focusing on increased and better programming, and increased in better networking opportunities for you, as we know that is very important to our members. We're also going to be doing some internal and external research. We want to find out what, as members, you think of the organization. For those people who are not members--we want to know what you think of the organization, as well, so that we can continue to improve and grow as a Chapter. We believe in building organizational infrastructure and improving efficiency so we're very dedicated. Our volunteer force is very dedicated on focusing on those areas, so you have any input or suggestions for us, we welcome it. If you're interested in volunteering for the chapter, we really welcome that. As part of our desire to improve the infrastructure, we really need volunteers to fill our committees. Melissa Okimoto, our Director of Volunteers, raise your hand, Melissa, is here. If you're interested in talking to her, she'd more than happy to chat with you about some of the many opportunities available as volunteers at AMADC. So thank you again for allowing me to speak to you. Now it's my pleasure to introduce to you the moderator for this evening's discussion, Maurisa Turner. Maurisa also happens to be the Chapter's Vice President of Marketing and Communications. Maurisa is an accomplished marketing professional with more than 14 years of professional marketing experience. Her background includes developing innovative and customized marketing strategies, communication roll-outs, event planning, public relations and partnership development. She has experience in a variety of areas, such as economic development, hospitality, technology, telecommunications, accounting, retail, and legal services. Maurisa, is there anything that you really haven't touched on in your career? [Laughter] She launched her own marketing/public relations consulting business recently offering professionally tailored marketing exclusions, exclusively to small businesses, boutiques, entrepreneurs and other private entities. She serves on the Board of the Greater Washington Fashion Chamber of Commerce, which she was just featured recently, I might add. She's also a member of Success in the City Professional Women's Organization, Washington Women in Public Relations, and a Social Committee member for the Virginia Tech Alumni Association. So, welcome. Thank you. [Applause] Maurisa Turner: [I have to move this lower [microphone] for a 4' 11" person.] Good evening, everyone. Thank you for coming and thank you, panelists, for being here. Before we start off, I'd like to get a little poll in the audience about how much everyone knows about social media. And I'm going to start with the basic question. Raise your hand if you know what the definition of social media is. Who is currently using social media? [Laughs] We have applications here. How many people are using Facebook? YouTube? Twitter? How many people blog daily? [Laughter] OK, weekly? Alright. And how many people do it for business? Personal? For both? OK, alright. How many people work for organizations that make it a requirement in their business to have a social media plan? Do any have a work or an entity where they're adverse to using social media applications? [OK.] May I ask? [OK.] Is anyone Twittering right now? [Laughter] Alright. I just wanted to get a good pulse on just how the background of how many people are in the social media phase; how they're using it--business versus personal. And, of course, we are here trying to ask the burning question, how does this innovation and technology really affect the marketing mix? And, showing case studies, and proof-positives, and results from our amazing panelists that have used it very effectively and dynamically, and learn some of their points and tips, and how they carry it on into your background, into your career, as well. So, let me kick off one question I'm going to talk this to Gray [Brooks] [Laughs], as a very interesting and exciting track recently. This question is for you, and of course, everyone else still on the panel, please pitch in. Last year, we saw a political candidate and Marketer of the Year, beating out companies, such as Apple and Nike. Many would argue that the technology behind the Obama campaign helped drive the brand, and spark the excitement of President Obama. Please give us your thoughts on power of the 'Obama' brand and how technology affected the marketing of his candidacy. Gray Brooks: Sure, first of all, can you all hear me OK? [Yeah] Thanks for having us here tonight. You touched on a couple of the words in there that I think that are very crucial, but that sometimes they're too easily considered. And one is "technology", and the other is "brands". The people at the top of the campaign did varied work, and I think hired a lot of very good people. But this is my third campaign, and I [...] other campaign. [Laughter] It would be a mistake not to realize that even when we're screwing up, we got by ok because the package we were selling, the candidate himself, was really good. So, technology enabled some revolutionary things, but also it was still a matter of selling something that was already a good product. The other part of it is that, it would be a mistake not to realize how much effort went into the branding. I think the advertising industry was very conscious of, and very, I guess, more knowledgeable about the work that went into the branding of the campaign. Before the general election, we were hiring several graphic designers to focus that exclusively on adding artistic depth to the campaign at every level. On the Web site, we managed to subsume all the print design, all the [...] ads, everything that people saw down to the literature being handed out in mailboxes. We eventually were able to go through these two or three people, so there was consistence. It was based around a design that people thought conveyed a message even without words. And then the rest was kind of adding technology on top of that. But those two fundamentals of having really good product, and then actually truly focusing on brand, in trying to say something that you thought out. I was a huge part of that. Aaron Brazell: I would say also that there was a huge emotional need in the constituency in the American people to have the technology come along to accent the product. I agree everything that Gray said. There was a great product there. The technology really enhanced it, but what really drove the point home was that there was a need for something, and that product and that technology enhanced that, and brought it out. I think any, no matter what it is, you're not going to get anywhere without the technology, and you're not necessarily gonna get anywhere with just the communications side of it in the product. But if you have three of those things all combined, I think you have a dynamic trifecta. Shana Glickfield: In my experience with social media consulting professionally where I advise corporations and nonprofits, and even individuals, I think a lot of people now want the Obama-like results. And I think it's important for marketers to understand that it was a big campaign, as the trifecta was taking place, and that you can have a very successful social media campaign without having the Obama-like results. GB: We definitely want to be over our two lessons we learned here is that it was merely a case study. It was a huge case study in one that has a lot of material to learn from, it takes years. It's just made up of best used strategies. The fact is, it's a mistake to see that something as ultimate, when really, it was just one example. Patricia Mejia: I would add that I think you had conversed a lot of things and also you're first?, you're innovative, so I think from a marketing standpoint, it's important to think about what the next thing is. Timing is everything when it comes to marketing, so I think it's a combination of things sort of lining up. It's like a perfect world in the negative, but things came together because of the timing, as well. AB: You have to drive that point home. If you look at it, it's just not a political panel here, but as an example, since we're in that space already with the Obama campaign, you look back at 2004 with the Dean campaign, they also did many of the things that the Obama campaign did do. They had arguably a great product. I didn't like the idea, but that's a different story altogether. [Laughter] They supposedly had a great product. There was a lot of great messaging there, but the emotional aspect of where the American people were with his outburst, and all these other things that happened just didn't coalesce the whole product, the trifecta - I love that word [Laughter], actually come together and do something where we saw completely the opposite side of the Obama side. MT: Great. Thank you. Of course, we know that each of you blog either on personal or business-related. There's been some questions out there that some think that blogging has jumped the shark', so to speak. What are your thoughts on that? GB: I don't mean to monopolize the time, but people say it's great. DO: So, first I'll say that it's a pleasure to be here. I see a lot of you out there that could be up here, so I wish this could be a roundtable where we all could be talking together because I'm sure that you're doing things that we don't know about, so I'd like to just open that piece of it up if you have thoughts, let's just share them. If I can step back for a second, I would say that it's really important to understand what social media is and isn't. I think a lot of people consider social media to be a medium, but I consider it to be a tool, like a telephone. You don't place an ad in a telephone; you place an ad in the yellow pages, and for me what social media is, is it's a vehicle. It's a tool that allows me to take the expertise that's inside the head of, let's say, whoever we're looking to profile, and share that with the people that need it in the moment that they're making a purchasing decision. So for example, if it's real estate - I started a real estate company six years ago, and we had really competent realtors, but nobody necessarily knows that unless you can use tools like social media to allow that expertise that's in their heads to get to the people that need to know it when they need to know it. So, what I would say about blogging, which to me is the component of social media, is that blogging allows you to do some things that you can't do otherwise. I like to say that Henry Ford would love blogs, because when you get questioned, you've answered twenty times already by e-mail instead of spending 15 minutes composing that answer again by email. Spend three hours writing a blog about it, a really researched in-depth answer; and then when somebody emails you that question, just send them back and answer the blog. You're making an assembly line of expertise, right? So, very importantly at the beginning [...], I would say social media is a tool, not a medium, and blogging is a very powerful tool. You also get great Google lists out of it when you blog with original content, which means that when people search for keywords, you're the one that comes up as a subject matter expert, so to me, blogging is so very pertinent. PM: I would add to that is that blogging is important, but authentic blogging is so much more important. So I think the authenticity people see through the salesy part of trying to sell you something to position yourself. The authenticity is what people are really looking for. They're really yearning for it, because they're kind of like over the marketing. I just had to add that. AB: To go the extra mile there, I agree with Daniel here. Blogging is one of those places where you create content that's going to be there forever, arguably, unless the internet blows up, which is always possible. They're also going to be there, and the search engine's Google, most importantly, is going to find it, it's going to be there all the time. You can certainly refer people to them over email, or whatever. I think one of the big questions about is blogging. Is blogging jumping to the shark? At least this is the side of the conversation I'm hearing from the technology side, it's the question that's posed, it's blogging versus social networks. So your Facebooks, your Twitters, your YouTubes and what have you, Tumblr. Why spend more time writing on a blog when all your costs are going into Twitter? That's the side of the conversation I'm hearing quite a lot. In fact, I don't know how many of you, do any of you know Dave Troy? [No.] Ok. So David Troy is an entrepreneur. Actually, more towards Baltimore, but he's involved with marketing, as well, so I thought some of you might have heard of him. Dave Troy asked a question on Twitter, maybe three weeks ago, "How many of you are blogging? Since Twitter came around, are you blogging more or less?" He was making the assumption that everybody blogged less. I find I blog more, because of Twitter and still sell all that much, but the reason why is you can have all these thoughts out there in social media, and social networks, etc., but, unless you have a place to put that to like really park it, and grow it, and create an audience around. And you just can't do that on social networks. You can certainly share your thoughts. You can share your links, and share your list, this and that and other thing, but it's hard to build community around that. And, if you're working with a product or company, you're trying to drive the product. You're trying to drive some software, you're trying to drive something that creates more sales, and you want to build community around it, because that community is going to turn into your biggest fan [trusts?] So, is it valuable to be out there on Twitter, absolutely. You're out there, you put your thoughts out there, you pick every opportunity, you can't conversate with the people who may be buying your product, may be buying your company, may be engaging with you in business somehow. But, if you really are going to build a community, you're going to need the blog. So no, blogging has not jumped the shark. That was a long-winded answer. SG: Blogging, in my experience, also, a lot of the great [...] that mention SEO[?], I like community building, a couple of other things, but I think the solid leadership comes from putting content out there, and I think a lot of people get stuck with blogging because they think they have to sit down and write this 3-hour think piece every time. And that's not the case. People don't even like to tune into a blog and see all the same text over and over. You think about how to take the pressure off and make yourself a better blogger. It actually takes less time to judge. If you're going to send something to a couple of your colleagues, from a newspaper or video on YouTube, instead of circulating it via email, I would just post it to a blog. It'll take just as much time, but you're really building your blog out. MT: You have a question? Unidentified Female Speaker A: Yes, I have a question. You're all talking about building communities, and so like sending it email around to people you know, or doing it on Facebook or Twitter, will it follow you? I find it hard to understand how is building communities around blogs easier, than building? GB: Just jump in. Part of my answer to you definitely revolves around my students' overall question, and there is a really, really useful plagiarism of Benjamin Franklin, don't live to geek." And it's cute and easy to remember, but it really does get back to the whole point of all this, and that is that no technology is good, or bad, or going to work, or not going to work. It's just another tool, and we're at a point today where we have more tools and more capabilities than we ever had before. But that gets us back to the original philosophical question of, "What are you trying to get done?", and then, "How are you going to do it?" And the technology, like blogging or anything else can help you, right, and if it's not helpful, then don't use it. The only thing that I think matters here is just asking yourself, "What was I doing already?" and, "Can I be even more efficient?" Or, as efficient, maybe, as with some side benefits by using this other thing. And, so, there are many times where you get other side benefits by blogging, as opposed other means without other extra costs and effort. Like you said, instead of emailing everyone in the company, if you post it on the blog, its adding content to your blog without any extra effort. U/i Female Speaker B: But how do you drive readers to the blog? GB: There are two ways to that. One is, if you compared to what you were doing before like sending an email with the content in there, and it [...] around the link, that's just as good. And, so you're not losing anything on the process. The other thing is, the more you write, the more content you create, and the more you do actually adds authenticity, and try to add something that's worth reading. People find that, and that's a great thing about Google, and a great thing about the internet is that quality material rises to the surface literally on its own. PM: One thing I would add is, I think as marketers we really need to stop thinking about us, and start thinking about the people that we are trying to reach. So, if I were you, I would think about what's my target audience care about. What influences them, what do they care about? And so, are blogs relevant? It really depends on who you're trying you trying to reach. If you that the people that you're trying to reach like to find out what you think, and like to, sort of, get into you head before they'll start to trust you, then I think the blog is a very useful tool. The other thing I would say about building an audience around the blog, it can be damn expensive. So, I understand what you're saying about how do you build that community on the blog if you're creating all this content on, why wouldn't you just jump on Facebook and put your original content out there, or put it on Twitter, because it goes to various people? AB: Can I ask a question? Why would it be expensive to build an audience on a blog? PM: It depends on your topic, right? If you're blogging about something like Obama, then surely, everyone is always searching for Obama. AB: You're talking about buying keywords, is that what you're talking about? PM: If you're buying keywords, buying impressions through advertising - that's my opinion. I've seen it, it's expensive to build a community around [Cut off.] AB: [Cut in] I've never done that in my life. I've got the largest business and technology blog in DC, and I've been going at it for five years, and I haven't spent a dollar. GB: I think her point is very valid, and definitely reflects on everyone's company and that is, new media has infinite possibilities for being a black hole that you just pour money down. And it gets back to the question of, if you just think, I don't understand this, but, hell with it, we'll just spend $15000 and get some results, that's a foolish way to go about it, and you're pouring your money down the toilet. Whereas, it's important to realize that the baseline is free, and, starting off with just using these tools in a forthright and pragmatic way doesn't cost you anything. And you can add money to get more results from there, but it's a mistake to just add money and to get more results from there, but it's a mistake to just add money and expect results. DO: And to add to that, it's a very personalized, individualized thing for everybody, it's very easy to blow your budget on Google adware. I mean Google will just charge that credit card, and before you even know it, you've spent 20000 bucks. But, on the other hand, it can also be expensive in time, and not expensive in money. It takes time to put that original content out there. I'm a very pragmatic guy. I have a voice recorder on the table here, and a camera up there, I'm capturing this content. Why am I capturing this content? Because, this was really valuable content. If you think about this, what's all of our time worth? I don't know, $100 an hour, $200 an hour, more? And, how many of us are in this room? This is a very expensive session that we're having together, and the irony is that everyone's going to walk out of here, and all this content would have been lost. It's amazing, I have to think that in 20 years people are going to look back and say, for the first x-thousand years of human civilization, you're telling me that content was just lost out there, with [...]. [Laughter] It doesn't make sense to me. So, I capture the content whenever I can, I have a woman who lives in Washington state who transcribes it for 15 cents a minute, and I put it on my blog. And, I've been able to get a page rank 5 on Google for a domain name, PointAbout, that's been around for less than a year, which is amazing. Google is thirsty for original content. So, you're asking me about driving traffic, that was your original question. And, my answer would be, only one of your goals is driving traffic. Another one of your goals is saving time. If you can write something on a blog, instead of writing it a thousand times by e-mail, poorly, write it once on a blog, well, and send that blog out - a] you've gotten a time savings out of that for all the future people that ask that question, but, b] by putting that original content out there, or even better by capturing content - capture your CEO, or CMO. When I was doing real estate, I would wear a lapel mic, and I would tell my clients, "Do you mind if I just record me showing you homes?" Because there are people out there that have never bought a home that would love to know what the experience is like. [Laughter] And, then I would have a woman transcribe it for 15 cents a minute and put it on my blog, right? Right, and that's a lot of rich original content, and Google will reward you for that. SG: I think we have time, two things that I want to talk about, that I'm not an expert on Google search engine optimization, but I do think we should just say for the audience here, in case people don't know, like Google Juice, the way Google ranks you is based on how frequently your website is updated, in addition to how many times you use those keywords. So, I encourage all of you to get with your web team, if you're not already, or whoever has your analytics, and find out what words people are using to find your site, and really optimize around those. And, a lot of people start their web experience with search. [Aside to panel] I don't know the statistics, do you guys, it's like 90%? [AB confirms it's about 90%.] So, when we're talking about like a pragmatic strategy, I would definitely say start with your search terms and [to DO], do you want to talk about Google? DO: I just going to say that Google is very smart about it. They even know of the domain name address, where the domain name was registered is the same, it matches up to the address on your website, they will give you credit for that, because that shows that you are actually the owner of that domain name; it gets down to that level of detail. So, Google SEO - search engine optimization should be for any business, I think, a key part of your initiative, because that's like buying real estate in New York in 1900. You can rent that space through ad words, but if you put the time and effort now into buying that space, you get Google to like what you're doing now; it's going to pay off for the next 100 years. GA: The one thing I was going to just put on top to what the gentleman said a couple of times before was, he is incredibly right, because one third of new media as a whole is content, content, content. And, you're crazy if you have a company blog that is updated once a week. And you're crazy if you have a Twitter feed, but, don't actually don't create anything new, you just link to what you're already, [changes thought], fresh content is crucial. And the fact is, he's ahead of the curve on all this, but every person in here should blog and say, "Today I went to this forum, and here's a link to the video." It's connecting to what someone else has done, it's good content is right behind having you done[?] the content yourself. MT: Let's bring us into organizations, and it's interesting that there are still companies that still convincing of having a social media plan. Us, as marketers, we have some executives you can to talk to until you're blue in the face and try to convince them to change or consider a new idea. But those companies are for those individuals that work for companies that are adverse to this social media craze, how can you convince them that this is good for their business? AB: I think all you got to do, and I'm going to avoid doing the normal, somebody's going to bring up Zappos, someone is going to bring up Dell, somebody's going to bring up Southwest Airlines, but, I think [Some bantering and laughter]. I think if you look at the [changes thought], once you get away the head of the tail of the big companies that everybody knows that using social media, I think there a whole lot of really great examples of companies that are doing it really well. And I wrote a blogpost on my blog the other day, just like the greatest experience I ever had with customer service, via Twitter; and that was with my bank, 1st Mariner Bank, in Baltimore. I was having a really bad day as a result of them, and went ballistic! [Laughter]. Their customer service guys on Twitter reached out to me and through a couple days of exchanging direct messages, and him going above and beyond wearing more than the minimum pieces of flair [Laughter]. I'm telling you, it was great example. You take a look at that, and now this guy is getting all kind of attention outside of my blog, outside of 1st Mariner Bank, there's a number of other posts that have been written about my experience, and all of a sudden you start seeing a pattern that there's a direct line that goes from the engagement in social media to the ROI that the company wants to have, every company wants to have. And I think that, when you're talking to the executives, when you're talking to the people that make the decisions at the top, they want to know where is the value for the company. It's nice that there is this experience; it's nice that you can talk to customers, but how does it actually help us run a business and make money, because everybody wants to make money, and that's the end of the day. PM: And more and more marketing is going online, I just looked at some Forrester[?] today that was looking at the growth in interactive, where it's coming from, it's coming from traditional channels. The emphasis is there, the audience is there, so I think it becomes a lot easier when you start to see your competitors being there. As a business-to-business marketer who has always been inside companies having to sell ideas before they actually get approved, a lot of times people will respond best to what they're seeing their competitors do, or where see an opportunity where their competitors are not. A lot of the time that I spend in my job is looking at what our competitors are doing, or not or doing, so that we can do it first. SG: I'd say Pew Internet and American Life, they do all the demographic research of who's using social media, and I think that's really important information for executives who haven't been convinced yet, to really dissolve the myth that the blogger is a teenager in the basement. And, I think the fastest growing demographic right now on Facebook is women 50 and older, and it's growing by hundreds of percentages a month, and we just had the officication of Twitter [Laughter]. We're also absorbed at who's using it - it's our world. But, I think people, who it's not their world don't really realize that is where the majority of people are, and you have to go to where your consumers are, and that is Facebook and Twitter. DO: I'll just use a couple of real examples. I'm a very pragmatic guy, right? So, as an entrepreneur you have to be really pragmatic. PointAbout is a company that makes Ifonets, we actually made an Ifonet for 1st Mariner, but, I'll use real estate, because it's such a backwards industry, nobody even knows how to check e-mail in real estate. So, it's really easy to get progressive in real estate. And, I'm a big fan of YouTube, I use Vimeo now, but, it's just like YouTube. I am a big fan of, for example, I made a lowball offer video, which is just 'drodio.com/lowball.' It's our real estate company name .com/lowball. And, I walked potential clients through what the steps were to make a good lowball offer. And, there are some things that we do that are different from norm, or whatever. I can't tell you how many clients came to us and said, "I watched your video and I want to work with you." It was a warm referral lead, the thing that realtors will kill for. This is very significant, we had cold marketing leads coming to us as if they were warm referrals, because they felt like they knew what we were capable of. Again, it's getting the expertise out of your head, and into the hands of the people that you don't want making that decision, so I think the really way to start is with something like YouTube, and to take a video of the product manager, don't take a video of the PR person, take your video of the product manager at your company who has lived and breathed that product and knows it in and out. A very real video, into what you're saying, does not marketing speak, don't edit it, don't make it look all glossy, make it gritty and real, and put that up on YouTube, and then send people to it, or use Google search engines and officications[?] who can find it, and you will find that's a very easy way to have a small test, and all about making the food before you build the restaurant, don't spend all this money on building the restaurant and nobody wants to eat the food. So, small tests, and you can then show your boss, "Hey, I did this video and we got 20 sales out of it." And it's a very trackable thing. MT: For those that work for organizations, if you don't mind me asking, that are still on the fence, or adverse to it, what's the reason? [Some disjointed comments from the audience.] U/i Female Speaker C: [Extremely poor audio.]The reason is the RY[?], there has been a lot of research with Twitter and other social media[?] that talk about the RY to try to shield my company's [...] officers. [...] field marketing has a 45 [...] RY [...] the numbers go up [...]. Social media is not there, and, so, even though we have a lot with Twitter, and [...] everybody will comment, but the weak [...], and everything, I personally maintain it's great, but my CEO [...] and he [...] numbers wise . So, I would say that probably is a lot of [...], we want to get the highest return on what little resources we have, [...] social media [...]. DO: See, I take a big exception to that, and it's not with you, it's with your CEO. I will call your CEO personally and talk to him or her [Laughter.] Because, the cost is zero, it's an intern's time. And, you know what, the intern can do it the best that of everybody at the company. So, take the unpaid intern and have him do a small test - a very small pragmatic test. PM: I disagree with that. I tell you. I think it depends on the business, right? And so, in some businesses and certain niches, it's fine. Your intern's going to do a great job of representing your brand. I think with other businesses where you have a complex product that you're trying to sell, or complex solution that you're trying to sell, it's something that needs to be bought in at the top level, because it requires the involvement of high-priced people. And that's just been my experience. So, looking at it from different perspectives, small business - large business, business - consumer versus business-to-business, it really does matter. AB: I can see where you're coming from, and I've already fought with you about it today [Laughter.] What I would say is that I find it really interesting that your CEO would put more stock in ad words that he would in social media engagement. Cause, at the end of the day, I hear the argument that he is making. At the end of the day, you're putting your money into ad words and, you might get the results, what are the results? So many impressions that actually turn into an actual sale. And, these are rhetorical questions, right, so I'm asking not asking you directly. What I 'm saying is you can put $5000 into a campaign and never get a sale out of it - that's trackable, Google delivered those impressions, but is that actually a valuable investment when there's no sale, on the other hand, like an intern, or somebody, anybody in the company getting out there and talking to people like they want to be talked to in the effort and hope that you might get a sale out of that, probably has a much higher chance of actually converting than, instead of following ad words up there and spending thousands of dollars. GB: So, I think that part the confluence of where I believe both Aaron and Patricia are right, has to do with, I've been advocating for a very realistic and down-to-earth investment of money in the media. I do believe that it's worth investing in, and I believe it can be done well. He's right, that when it comes to the financial investments, well, part of it's very minimal manpower, and very minimal financial investments, it started. The important question though is whether or not the upper echelon and the leadership, as a whole, are willing to invest in the media, personally. And if you have an organization where you tell the unpaid intern, 'Hey, go do this, ok, how many [...] just go do it", and no one talks to that intern, and they attempt it on their own, you're going to have terrible results. And the question is, if that intern is allowed to, once a month, take a video camera and have 30 minutes of the CEO's time to do a direct-to-camera video for the YouTube Channel - that's going to work, and that didn't cost any money other that the CEO's time. But that's the problem is while these organizations where the CEO says, "Yeah, but I don't have time for it, my managers don't have time for it. We want someone to go do something." MT: Let's take a couple questions. U/i Female Speaker D: I work for a large government contractor and we are just now, we just hired a social media manager, and started a YouTube channel, but it's taken a long time and it's a fairly sizeable company. And I think the resistance is security, as she mentioned. But also, our clients are government decision makers, and they tend to be[?] older, and the belief is that social media is for a younger generation. So, what have you found in your research and your findings that I can take back to my CEO and say, "No, there is research that shows this attracts older government decision makers." PM: So, Forrester just put out a report, a social technographics report. So they look at different demographics, and they map their social behavior. So, they start at the most engaged all the way down to people who are just spectators or uninvolved. And that's the kind of data that you could put in front of a C-level person, or director-level person. They want to know what's the survey data telling you about the kinds of people that you're trying to reach. I would definitely recommend looking at something like that. [Clarifies for questioner that the organization is Forrester Research.] DO: Also, Pew Internet just recently did a talk at the Web Editors Roundtable which is a great event. I captured the content, so you're welcome to come see it. It's on the site, pointabout.com - just search for Pew, and you'll find that. It's called, "The Nine Tribes of the Internet", and it talks about very specific slicing of all the different types of users, and what the growth trends are, or, they're not all growing, but, many of them are. A lot of them do skew, just actually like [...] was saying. And Patricia, just for the record, I'm not going disagree with you at all. I completely agree with you. In the best of both worlds, this is a top-level down strategic thing that's being done, but I feel like we're all kind of sneaking out of the house in the middle of the night. It's like you have to go show some small successes in order to be able to get that big budget, and I guess that was my point. MT: Let's take two more questions on the topic. SG: I think one thing that we haven't gotten to that could reach your audience is that journalists are watching social media, because that's where the buzz is coming, and even if it's not reaching your consumers, it's reaching the people who write to your consumers, who are still reading the paper on paper, probably. So I think you can relationship build with journalists directly, you can keep story ideas, and position yourself as a thought leader, via Blogink, so that when it comes time for they need an expert for their story, and they either Google, or they've seen you Tweet about it, then they're going to reach out to you. So, that's our long term. U/I Female Speaker E: And that's what exactly we've done. We've used it on a PRN, but not so much in the market. MT: Carrie, in the back, do you have a question? Carrie: [Very poor audio] I've noticed with some companies that the push for ROI comes [...] in that it vies with traditional things like advertising and public relations. It's actually not, [changes thought], you can't always make that tie from placing that ad to placing that sale, and [...] metric. So, they still do it, because they've always done it. And, the social media is damned[?]. And, I'm wondering, take the part that says that's part of it, and also, maybe some tools to overcoming that problem[?]. GB: One thing which I think is to your question, and to the question right before it, it's worth trying to double[?] show them surveys and results that have been done by their people, but it's incredibly important to be tracking the work you're doing in the meantime, it's sourcing everything you can. And between Google Analytic and YouTube accounts, they now have analytics built into it that you can actually see the sex breakup, the age breakup of people watching your videos. On all these things you can be tracking what's going on in the meantime. And, you can be saying, "I know that someone came to this part of our website and bought this from one of our ads, because we can track that." And, it's of incredible importance to be trying to convince these people by saying, "I've doing this for the last few months and here, I can show you quantitative results." And try to get that from your TV advertisement, department, or you old media, because you just can't. Not like this. U/i Male Speaker A: I have a comment on that, too. You can do targeted access campaigns. So, I'm a big believer of doing a lot of testing, as well. That's what I was going to tell you. Google allows you to target by domain, target by geography, and target by time of day. So, if you're trying to reach government influencers, 8[:00]-to-5[:00] from D.C., from Punjab, Thai domain names, and whatnot. [...] if you do a lot of really small parts to see what kind of traffic is running to your site, outgoing [...]. GB: Just the one thing that already enforces that, and I forget about this, but, ad from Facebook? You can target it to say, I really want these people to see this if they work at the department of whatever, and such, or, I want people to see this if they are literally on a computer in the Capitol Building. You can target like nobody's business. DO: You can also get on the content side. Google offers a great set of tools. How many people in this room are doing AB Multivariate testing, for example? I not surprised the answer's zero, so AB Multivariate testing is for every piece of content you have, every web page you have, you have the a] control, and, the b] contender. And Google offers this for free, where you can say, "Google, I want you serve up about a 50-50 ratio of what I think is the best page, and then what the intern thinks is the best page, or whatever. And let those two pages 'duke it out'." And Google will tell you which one is performing better, and you just keep repeating that cycle. You can increase your conversion rates from 1% to 7% on a page by doing that. Which is very significant, you just increased by 700% the number of people that are contacting you off of a page. So, there are tools you can use like that. Also, just very quickly to your point, there are some very non-threatening things that you can do with social media. You're saying that you're already, for example, interviewing the CEO, or your doing a blog list. Start, transcribe it, and turn it into text. All that great video and audio, Google can't see that, it's opaque to Google. So, you've just spent all this time creating all this great audio and video, but you're not getting any Google credit for it. Spend $.15, $.25, $.50 a minute for that on Craigslist; you'll get tons of responses from people willing to transcribe your content into text. Put that below the page, but, the video and the audio, the transcription is not for the humans - it's for Google. MT: Let's talk about 'Buzz', and what is Buzz tracking, and can we honestly measure that. How can you honestly measure that? AB: I think everybody's going to say Twitter. Hash Hacks[?], but, I think that's also kind of a game system, and I don't think it's a very good system. But, certainly, although I don't know if there's an answer to that, I don't know if anyone here has an answer to that, you can probably patent it. But, there are all kinds of different [changes thought]. NY Times has BlogRunner, which is sort of their top news in a variety of different verticals. It's not just NY Times content, they track blogs, and they track other things, as well. In political space, there's the media randoms, and the technemes, and the Technoratis, and all these different sites that will sort of give you a picture of what people are talking about at the moment, with Twitter you have the hashtag and the trending topics. I don't know if there's really an answer to that. SG: How many people in here are familiar with the concept of the long tail? The idea is that the top 10% of, like, say, blogs are getting 90% of the readership, and then there's long tail of like 90% of the blogs are only getting 10% of the readership. And, they are these very niche communities. But there is a lot of value, and there are books written about this, and it's a big popular theory in social media. There is a lot of value in the long tail, and that's where people even see the internet going with trends with hyper logo[?], and things like this, the way we are able to do all this targeting. So, you can generate Buzz with a very small community, but it can be a very important community to your brand, or your mission. So, it goes back to the Obama-like results, that are graded on a national level, but it really depends on who your audience is, and who you're trying to reach. And it could be very easy to get the attention now, it's like, you can't really get the mommy fear, but maybe just the mommy fear who knit, too, or has a child who's dealing with an illness, and they're doing a lot of doctor's visits, but that may be a very key audience for you. So, the idea is maybe don't worry about getting the biggest Buzz, but really getting a buzz with your niche audience. DO: So, two quick thoughts - one about long tail, and the other about Twitter. First, Twitter. How many people have an RSS feed of Twitter searches set up right now? So, three people. Alright, you can do this when you get home tonight, and this is awesome. I'll tell you, this is going to change your life, maybe. [Laughter.] So go to search.twitter.com, and just search for anything, search for your name, your company's name, maybe a product that you're interested in, you know, 'F22 Raptor', whatever it is for you defense folks [Laughter.] And then, on the top right there's a little RSS icon which most of you, do you understand RSS? Right, so you can click on that and you can come into your e-mail, or into an RS reader - you will be amazed at what you find. The interactive manager for Coca-Cola was doing this, Coke has this Coke Rewards thing, and I asked her, her name is Carol. I said "Carol, are you tracking what people are saying about My Coke Rewards?" She said, "No, we're not." I said, "You should be, let's do it!" [Laughter.] And, people were like sharing codes on Twitter, and bashing it, it was very enlightening. So, that's super simple, it's free, it takes a second to do, it'll make you look like the smartest person in your office. You also get the news first when it's something that is pertinent to you, so that's very user [cut off.]. AB: You can also embed it. You embed those searches in Twitter. You use Twitter.com, you do your search on the sidebar, and then you can actually save that search and keep going back to it, as well. DO: So, it doesn't really answer the Buzz question, but it, at least, let's you personally see about things that you care about quickly. PM: Well, there are also tools, like Metrics, and I think, Nielsen, either they bought Metrics, or they have their own competing products that actually look at brand perceptions, and so, will look at beyond just what's happening on the web, overall perceptions with the brand, with the social media being a component of it. So, that is a tool that's out there, or a capability that's out there, that if you're in an organization that's very brand sensitive, very focused on what people are saying about you, you may want to invest in something like that. GB: Just one quick thing. I agree with using all of these tools. My umbrage connect comes back to the original question, and I'm not a big fan of Buzz, intrinsically, because in my mind, Buzz is ephemeral, and it's too ghostlike to just chase it for its own good. And, I think it's a mistake to not be focusing consistently on the question of whatever we're doing right now, already; can we use these tools to get an extra 5%? Can we use it to become more efficient with what we're already doing, and see it as a more down-to-earth disimprovement[?] of your results, as it is? MT: What were you going to say about long tail? DO: Do you want to hear about long tail? [Laughter] Are there any realtors in this room? Can you raise your right hand and say, "I will not share this with any realtor?" Seriously, just raise your right hand, "I won't share this with any realtor!" That was your let hand, by the way. [Laughter] So, when you Google search for any home that's for sale in the D.C. area, D.C. Virginia, and Maryland, my own real estate company typically comes up number one in they Google search results. How do we do that? We use the long tail. There are probably only one-to-ten people searching for any specific property, but because we were able to expose a database of content and get Google to spider that content, there are apparently 1000 people a month that submit leads off of those terms. This realty company gets 1000 leads a month from exposing a database. And, so the point is, to the long tail point, if you have a database of data that you can expose to the internet, and you can make it so that there might only be very few searches for each of those terms, but there are so many of them. And also, part of the theory of long tail is when people are searching, for example, for a specific property address, they've done their research, they've probable driven past the house or they know the street. People tend, on the long tail, to be much more serious searchers. If I'm just searching for Alexandria homes, I might not be nearly as far along in my home searches if I'm searching for 1234 Main Street. So, if you have a database of content, you can use the long tail to really drive a lot of searches to your site. MT: Let's talk, this is kind of a two-part question, a personal question, but, social media as this tool is fairly new. How has it helped you in your business? If you could highlight maybe one major success, and you draw it back to the applications that you have, that you utilize today; and the second question is, out of all these social media applications, what is you favorite, and why? Gray? [Laughter] This may be easy for you. GB: With the campaign, everything was, media was an equal player at the table to every other department. And, its success story was enhancing the finance field, political operations, every element that was pretty [..] in the campaign. I got more done because of media, and that's it. And, it was not worth it, intrinsically, it was worth just a management part that was already there. SG: I would have never expected that this would be my career. I was a lobbyist, and I went to law school, and I am a non-participating lawyer, social media consultant, who blogs about D.C. [Laughs] So, it was really unexpected, but I think that I just really loved tinkering with the tools world, experimenting and really engaging in community, [Changes thought], I knew all these people from the social media community, the tech community, even if we only Twittered at each other, it's just grown my network exponentially. And, my favorite tool would probably be Twitter. PM: Siteworx is different from others here, we do website development. I'm a B2B marketer. I think for us, what has helped us be is relevant. So, we have a lot of very technical people in our organization that talk tech all the time. From a marketing standpoint, I don't want to talk tech, I want to talk business problems. So, I want to understand what people who are in our space care about, it's helped us, in my mind to be more relevant. And I will say Twitter, but Twitter Search. Oh man, it's just awesome being exposed to what people are thinking, and from a marketing standpoint, I spent my whole career of trying to get into peoples heads, right? This is like right in their head, like all day long, so I think that to me is the best tool. DO: So, a great story about Twitter, because I think a lot of people are trying to figure Twitter out. I know that I'm still trying to figure out. But, I think the greatest thing about Twitter is an elementary teacher would Tweet what was going on in the classrooms to all the parents, so that when their child came home, they could, instead of saying, "How was your day?", and not getting a response, they could say, "Hey, how was that project in Christopher Columbus?" So that's a great example of the power of Twitter. Twitter Search, I completely agree, to me is the most powerful part of Twitter, it's not sending Tweets out, but it's seeing what other people are saying. I think I've given a lot of examples. I got to say that this idea, like Gray is saying, that social media is a tool, it's magnifying the others things that you're already doing. It's taking that content and distributing it out to the people that need to see it. I feel very strongly that's how you have to think about social media - as a magnifying glass, maybe that's a great way to say it. AB: Well, if it wasn't for social media, I'd still be working for one of the companies you work for. [Laughter] So, I'm self-employed, I have my own company, I built my company around social media, around WordPress, specifically, and added to my [...] as well, in there. And, if it wasn't for my engagement, and, honestly, social media has leveled the playing field for many people. It just allowed us all to compete on levels that we weren't able to compete on before. If it wasn't for that, then, I wouldn't' be where I am today. So, certainly it's been very important in my career and my life. I will also say Twitter, it's the best tool out there. Is that the trend? [Laughter] MT: Well, speaking about Twitter, maybe, do all you think that it can survive without having to sell any ads? Is it going to stay? AB: Oh, this is really a good question. Actually, we run a Twitter business model, that's cool. That would be a great conversation, actually. I think what they're probably going to end up doing is not selling ads, because the ad market is, kind of 'eh.' And, too many people were getting their Tweets not through, 'Tweetered up', huh? Through TweetDeck and Seizement[?] Desktop, and, whatever your household variety Twitter climate[?], Twitterberry, whatever, they're not going to be able to thread ads in there. So, don't think that that is really the way it is going to probably go, but, partnership of carriers. How many of us use Twitter on a mobile device? Ok, yeah. So, if AT&T, or Verizon, wants to start taking a little bit of a Twitter tax out, I see that as a way for them to make money, and possibly, Twitter'd make money that way, as well, in priority. But, that's net neutrality, and that's not really what I want to hear. [Laughter] DO: A great example of what one of the founders of Twitter mentioned, they've been very tightlipped about they're going to make money. But, after a lot of prodding, and I think, and all things, D Conference, the guy said, "All right, give us an example." "Imagine the flower shop has flowers that are going to be dead the next day, they can send a Tweet out saying, half-priced flowers if you come by before we close today." So, the stuff like that I think would very, very powerful. GB: I'd like to pursue a bit of the Craigslist model. I like the fact that I don't have to pay the post from Craigslist. And the way they do it, funny, if someone wants to have a business model based around posting on Craigslist, then they charge a very nominal fee. And, so you can make it so it's free for everyone who's at home, everyone is just an individual. I think we want to actually organize this small, and there are a lot of possibilities therein. If you charge something that's incredibly nominal, and then the other part that's really overlooked here is the amount of data they accumulate is enormous. And, for the first time in history, we're able to take enormous amounts of data, and really start crunching it in very interesting ways. If you can start actually drawing graphs and very rich details about how Coca-Cola sought you out, the potency there is enormous. DO: Speaking of kind of keeping t
I used to be so laid back, non-pushy, relaxed. My time wasn't respected very much.
Now I'm getting a hell of a lot more demanding, pushy, and abrasive. My time is getting respected infinitely more.
Today I was running through a plan to make a client lots of money. We had fleshed out all the groundwork steps that would take 10-20 hours or so, but were just getting the entire thing down on paper.
It was a good plan, but he was kind of losing interest and mentally checking out.
We were halfway down the page. I said, "Okay, go back to the top and write this. 'If this project makes tens of thousands of dollars, I'm taking Sebastian to Boracay to go scubadiving.'" He laughs and does it, and then is a lot more engaged.