Francis Moran and Leo Valiquette

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Do you know how to dance with angels?

This is the fifth article in a continuing monthly series chronicling the growth path of Genevolve Vision Diagnostics, a life sciences startup based in Albuquerque, NM that is commercializing cutting edge genetic research to develop new diagnostic tests and gene therapies for colour blindness.

By Francis Moran and Leo Valiquette

It’s been a busy couple of months for Matt Lemelin, CEO of Genevolve Vision Diagnostics, as he hustles across the U.S. to raise Genevolve’s profile and, ideally, its bank account.

A year ago he made the mistake of letting his fundraising efforts lose steam after he secured a short-term investor. But those funds quickly ran out and he found himself scrambling without any fresh prospects in the pipeline. In our last post, we also talked about how Genevolve’s plans for a big launch at the annual meeting of the American Academy for Pediatric Ophthalmology and Strabismus in March had been derailed by delays in the lab.

A shortage of funds and delays in getting a product ready for commercial launch can be a conspiracy of circumstances that doom a startup. However, since we last touched base, Genevolve has scored the first sale of its Eyedox Genetic Test for Color Vision, and a strong likelihood of follow-on orders, with a multi-billion-dollar Japanese company that is commercializing its own colour vision research. It has also had expressions of interest from the U.S. Federal Aviation Administration — as we have discussed before, accurate diagnosis of colour vision deficiency is a pressing issue for the global aviation industry. This also applies to military aviation and Genevolve has developed a military-grade test that it will launch at the Aerospace Medical Association’s annual meeting taking place in Atlanta from May 10 to 13.

Filling your dance card

But infusions of fresh capital are critical to capitalizing on this momentum. In recent months, Lemelin has learned that wooing angel investors is an exhausting exercise in dogged persistence and constant learning to understand what makes the perfect pitch. As he points out, there is little resemblance between the real world of entrepreneurs and angel investors and television shows such as Dragon’s Den.

In February, Genevolve presented at The Gathering of Angels in Atlanta. Earlier this month, it attended a deal accelerator put on by the Maverick Angels in California.

“We presented to the Maverick Angels’ top-level investors and received excellent feedback,” Lemelin said. “They said our valuation was too low, they validated our huge market and said our idea is brilliant, among other positives. They were instrumental in improving our presentation tools and deal structure.”

Genevolve will follow this up with a presentation to the Texas Entrepreneur Networks’ Funding Forum in Dallas on May 10.

“It’s an honor to present to angel groups and it should never be taken lightly,” Lemelin said. “Generally speaking, most angel groups have a stringent screening process which can take time and most (proposals) are rejected.”

Most angel groups are looking for evidence of market traction, a strong IP position, a strong management team, potential to sell globally, and an exit by means of acquisition or IPO that will provide them with a strong ROI.

“The IPO market has been brutal for startups over the last few years and although it may have improved slightly, the most likely exit angels want is through acquisition,” said Lemelin. But, despite the fact that Genevolve has all of the ingredients which investors are looking for “retaining sophisticated investors in this climate has been extremely challenging.”

The principles of courtship

What lessons has Lemelin learned through all of this?

1. Get to “no” fast. Do not get strung along by hem-hawing investors. “This is critical and can be very frustrating for entrepreneurs and investors,” he said. “Investors hate to be pestered; on the other hand, the clock is ticking for the entrepreneur. Investors take their time on due diligence and one bad move could wreck the entire deal.”

2. Raising money can be costly. Many groups charge fees, sometimes steep ones. “Most people do not factor the cost of raising money,” Lemelin said. “The general rule is figure out what you think you need and multiply that number by 2.5. You could easily spend $50,000 on a $500,000 funding round.”

3. Be the last to leave. “If travelling to a presentation, stick around for a day or two and schedule breakfast and lunch meetings with potential investors,” he said. “Once you leave they can cool down fast.”

4. More eggs, more baskets. “It can be very frustrating when interested investors take one to two months to perform due diligence. Keep talking to as many investors as possible while others are chewing on it … It can take your CEO all of his time fundraising but keep going, never give up.”

5. Take advantage of other resources. “There are some great tools for both entrepreneurs and investors, like gust.com – an angel platform that lets entrepreneurs post their materials, track viewers and manage document flow and communications.”

6. Give’em what they want. “I have a business plan that is just amazing, it took me months to write, a year of tweaks, had it reviewed by some pros and they all say it falls into the top one percent of plans they have seen, Lemelin said. “I think I’m the only one who has read it – investors want it short and sweet: a two-page executive summary, a succinct and smart slide deck … show passion and hit the main points.”

Lemelin is also attempting to grease the wheel with a monthly investor email that he sends out to the contacts he has made, which provides an update of Genevolve’s progress and milestones that have been met.

“You never know, maybe a past investor candidate passed on the deal but would take another look if you meet a milestone,” he said. “This is another wise tool to add to the arsenal.”

Next time, we’ll see if Genevolve’s May travels bear any fruit.

Technorati Tags: Genevolve, Eyedox, Matt Lemelin, colour vision, color vision, colour blindness, color blindness, genetic test, eye care, optometrist, startup, life sciences, biotech, molecular diagnostic, angel, investor, aviation, IP, intellectual property, FAA, aviation administration, Gathering of Angels, Maverick Angels, Texas Entrepreneur Networks, Aerospace Medical Association, ASMA, gust.com

Getting ready for the big show

This is the next article in a continuing monthly series chronicling the growth path of NanoScale Corporation, a growing nanotechnology company based in Manhattan, KS that is commercializing various advanced materials and compounds for improving indoor air quality, removing pollutants, and containing and neutralizing hazardous chemicals.

By Francis Moran and Leo Valiquette

Crawford & Co. labels itself as “the world’s largest independent provider of claims management solutions to the risk management and insurance industry.” In other words, it handles insurance claims on behalf of insurers and, with operations in more than 70 countries, it certainly does not lack for scale.

Now a big part of handling insurance claims involves repair, restoration and remediation services. In the U.S. market, Crawford has this base covered with Contractor Connection – a network of about 4,000 general contractors who must continue to meet certain quality benchmarks to remain part of the Crawford network.

Throughout the year, Crawford hosts a number of CAT (for catastrophe) conferences and Contractor Connection events. These kinds of industry events are crucial for NanoScale Corporation to showcase its products before what is often a sizeable captive audience of disaster restoration general contractors and insurance professionals who are in a position to provide a significant boost to its business.

With the convention and tradeshow circuit heating up for a busy spring season, NanoScale Vice President and General Manager Kyle Knappenberger is developing battle plans to measure the effectiveness of the company’s prospecting efforts against cold hard revenues. However, he appreciates the less tangible, but equally important goals of general awareness building and networking with other vendors and product manufacturers.

“These events are places to meet new distributors and new potential partners,” he said. “It’s a meeting of the minds between different manufacturers that can also result in cross-promotion and lead sharing.”

In fact, it was such a “meeting of the minds” which connected NanoScale with a manufacturer that was bringing to market a new air purification unit. The two companies ended up working together to create a new NanoScale OdorKlenz cartridge to fit the unit.

In addition, NanoScale is working a variety of other regional education seminars at distributor locations where various vendors pitch their products to contractors, as well as events where NanoScale provides sales support to individual distributor retail locations.

NanoScale is heading into the event season having recently created a new commercial sales division and expanded the sales team. It has also secured its second nationwide distributor to boost its reach in the U.S. northeast and Texas markets. All of this puts added pressure on Knappenberger and his team to get NanoScale’s story out and capitalize on the new opportunities that have been created.

The right story, for the right audience

With all of these local, regional and national events, NanoScale must be cognizant of its audience. As we have discussed in our previous posts, the company is marketing products derived from innovative, and proprietary, nanotechnology research. It has two general B2B market segments – old-school building contractors who are unlikely to be impressed by a sales pitch that focuses on a technological wow factor and insurance industry professionals who are looking for products that will reduce their costs.

Regardless of the audience, NanoScale’s best hook is to focus on the health and safety benefits afforded by its product, without fostering the impression that OdorKlenz is some type of medical device. This means focusing on much more than just odor elimination since this is quite difficult to illustrate and doesn’t adequately convey the game-changing benefits provided by NanoScale’s technology. As with any product or service, the marketing effort must focus on its high-level, life-changing benefits rather than dwell on specific technical details.

NanoScale’s greatest competitive advantage is that it decontaminates an environment without the addition of potentially hazardous agents which themselves must then be eliminated. For families affected by a natural disaster, this means they can get their lives back on track faster. For contractors, it means they don’t have to deal with additional toxic materials on the jobsite and can reduce their equipment costs. A contractor’s cost savings can be passed on to the insurer. In addition, anything that allows for quicker remediation and restoration of a home or business reduces the costs which insurers can incur in a claim, such as providing a family with alternative living arrangements.

“Contractors are out there to make money, not do a job at cost,” said Knappenberger. “But insurers have their schedules for how much a certain job should cost. Contractors are usually working with insurance agents and adjusters who are trying to get them to reduce costs.”

Since OdorKlenz is a new product, contractors are sometimes reluctant to use it because they fear the cost will not be reimbursed by the insurer. Much of the work by Knappenberger and his team is focused on educating insurance professionals and contractors alike on how its products ultimately provide cost savings that make it ideal for situations where a contractors’ remuneration is tied to an insurer’s schedule.

Tradeshow 101

This brings us back to Knappenberger’s battle plan for the conference and event season. To make the most of getting NanoScale’s out on the conference floor, the team focuses on three fundamentals:

1) Go prepared. Coordinate with the event organizers to obtain lists of participating vendors, speakers and associations, and research who you will have an opportunity to meet ahead of time. “This is pretty standard stuff,” Knappenberger said. “But if you don’t do it you are already behind the game.”

2) Think through possible situations or questions that may arise with customers, partners and so forth. “Even if you don’t have a perfect answer, having recognized something could be an issue will allow you to better navigate it should the situtaiton present itself.”

3) Determine your objective going in and daily take notes and monitor progress. “Have a planning session each morning to make sure the team is on the same page each day.”

In our next installment, we’ll see how the effort is paying off.

Technorati Tags: NanoScale, OdorKlenz, nanomaterials, nanoparticles, , disaster restoration, restoration contractor, insurer, reimbursement, conference, tradeshow decontamination, remediation, sales, marketing, distributor, Kyle Knappenberger, CAT, Crawford, Contractor Connection, commercial sales

Looking for that sweet spot to get market traction

This is the fourth article in a continuing monthly series chronicling the growth path of Genevolve Vision Diagnostics, a life sciences startup based in Albuquerque, NM that is commercializing cutting edge genetic research to develop new diagnostic tests and gene therapies for colour blindness.

By Francis Moran and Leo Valiquette

Sometimes, you need to take a step back to get two steps ahead.

In the almost two months since we last touched base with Matt Lemelin, CEO of Genevolve Vision Diagnostics, this has certainly proven to be the case.

Genevolve was planning to make a big splash at the annual meeting of the American Academy for Pediatric Ophthalmology and Strabismus this month. An impressive showing here could spark the endorsement and early adoption from the broader medical community Genevolve needs to kick start the process for qualifying its Eyedox Genetic Test for Color Vision for insurance reimbursement. However, Lemelin decided to pull out of the show and refocus on the largest industry show of the year – the annual meeting of the American Academy of Ophthalmology taking place in Chicago in November.

“The stars are not aligning as planned for our launch,” he said. “We have had delays on the science side. A major challenge lies in, for a lack of a better word ‘transferring’ the test collateral from the research side to a commercial entity so that it works flawlessly. This has turned out to be quite a challenge. It is imperative to release a perfect product to preserve our reputation.”

There is a substantial market demand

It is a reputation that is still in the early stages of being established in the marketplace. Genevolve was founded in 2009 to commercialize non-invasive molecular diagnostic assays and treatments for clinical applications in the colour vision industry. Eyedox is the company’s first commercial product – a genetic test that can diagnose colour blindness in a far more accurate and thorough manner than existing tests, such as the century-old Ishihara test.

A growing number of daily activities and professions rely on normal colour vision and on accurate diagnosis of the presence and severity of any colour vision deficiency. However, traditional tests often cannot provide a proper diagnosis in terms of the type and severity of a deficiency, and often result in misdiagnosis.

“Over the years, we have received emails, calls and letters from thousands of frustrated colour-blind people,” Lemelin said. “The outcry from patients, together with feedback from practicing clinicians who have indicated that a genetic test will change everything for them, motivated us to develop the test as a commercial product.”

With its genetic test, Genevolve is blazing a new trail to create a global colour vision standard for all occupations. But this is a risky proposition at a time when investors remain wary of life sciences investments into new areas of research and the complex U.S. system for health insurance reimbursement is facing an overhaul.

Last month, Lemelin pitched Genevolve at a Gathering of Angels event in Atlanta. Inevitably, the issue of insurance reimbursement came up. But like every savvy entrepreneur hustling for cash, he understands the need to be ready for hard-nosed questions from potential investors.

“I suggest that entrepreneurs seeking investment be prepared for anything and have canned answers at the ready, especially if issues are presented at inopportune times,” he said. “I came away with some good leads and learned lots to add to my arsenal of knowledge.”

Among those lessons learned, which we will explore in more detail in our next post: how to better present to angel investors, how to negotiate with investors over the valuation of your company, and trying to make progress at industry gatherings where the social aspects appear to overtake the business agenda.

But it all comes back to reimbursement …

In our last post, we talked about how Genevolve’s colour-vision test falls into the category of molecular diagnostics, which can qualify for reimbursement through a complex pricing and fee schedule that uses “stacked codes.” These codes are used to tally up the costs associated with each step that is required to carry out the test, as well as the technology involved. A new test must go through a long and complex process to have new codes created and qualify for long-term insurance reimbursement.

Genevolve believes its Eyedox test can also save doctors time, by a factor of 10. While anything that saves time is a plus, the challenge is how doctors are compensated for their time and how this is claimed for insurance reimbursement.

At present, doctors are only able to bill the U.S. insurance system for their time if they are able to diagnose the type of colour blindness. Due to the limitations of standard tests, they seldom can. As a result, many doctors shy away from carrying out colour vision tests or see it as a loss that they write off. Not only must Genevolve attempt to execute a culture change in how doctors regard colour vision testing, it must still determine if doctors who use its test are able to make an insurance claim using existing codes.

Casting a shadow over all of this is U.S. President Barrack Obama’s new health care plan, which threatens to tighten the rules governing what qualifies for insurance reimbursement, the uncertainty of an election year and a new tax on medical devices intended to help extend health insurance coverage to uninsured Americans.

“All of this has a ripple effect on innovation and trickles all the way down to creating considerable investor angst,” Lemelin said. “Nobody, even the big boys, can figure out the reimbursement changes, many variables and many unknowns. It is causing many to sit in the sidelines, stifling innovation.”

… and developing contingency plans

One of the challenges for Genevolve is to design its test in such a way that it becomes easier for physicians to derive revenue from carrying out colour-vision testing, either by being able to bill the insurer or the patient. With changes to the U.S. medicare system, Lemelin said physicians are looking for new lines of business. Genevolve hopes to tap into this by bundling its test with other related vision products and services that are not billable to the insurer, such as contact lens prescriptions. In other words, make the colour vision test part of a service that the patient is already accustomed to paying for and is already a source of revenue for the physician.

Genevolve also has a contingency plan up its sleeve if it doesn’t qualify for reimbursement.

“We would switch to a boutique model in which we would then compensate doctors,” Lemelin said. “But, realistically speaking, we would need to take a volume approach and bring our price way down to make this model successful. There is a fine line here as far as losing our shirt, but we feel we can make it work as a last resort.”

Another option that Lemelin is considering is a group purchasing organization, or GPO, involving early adopter physicians and possibly partnerships with other vendors of vision products. The incentive for physicians to sign up would be that they would have exclusive access to unique products.

“It’s just an idea,” Lemelin said. “It is critical to evaluate all options … they all have their pros and cons. You have just got to somehow find the sweet spot and unfortunately there are so many unknowns that some of it is wait and see and shifting on the fly.”

Next time, we’ll talk about the pros, cons and complexities of wooing angel investors.

Technorati Tags: Genevolve, Eyedox, Matt Lemelin, colour vision, color vision, colour blindness, color blindness, genetic test, eye care, optometrist, startup, life sciences, biotech, molecular diagnostic, marketing, marketing strategy, angel, investor, insurance reimbursement, vision clinician, aviation, IP, intellectual property, patent, stack codes, Obamacare, American Academy for Pediatric Ophthalmology and Strabismus, AAPOS, pediatric ophthalmologist, American Academy of Ophthalmology, Gathering of Angels

Burning the candle at both ends as the clock ticks down

This is the fifth article in a continuing series chronicling the growth path of CommentAir Technologies, a startup based in Ottawa, Canada. CommentAir is developing a wireless technology fans can use at sports venues to receive the same real-time commentary as fans watching from their televisions, a wireless technology that also creates a platform for targeted consumer interaction. We invite your feedback.

By Francis Moran and Leo Valiquette

As we have discussed before, Katie and Luke Hrycak, the sibling founders of CommentAir, are bootstrapping their venture around their day jobs, an approach that calls for certain sacrifices.

Business meetings after 9 p.m., letting the wardrobe grow threadbare and valuing every dollar of friends and family financing is par for the course.

“I think the most difficult aspect about bootstrapping is resisting the urge to job search for something that will pay a ton, and also letting it take up all of your time,” Katie said in our first post. “People get accustomed to certain lifestyles and it is very difficult to let that go. You have to commit to a job that is less challenging for less money, but ultimately allows you more time for your own venture.”

In this post, we will talk in more detail about what it takes to keep the lights on, the need to delay gratification and at what point an outside investor may come into the picture.

Taking the lean approach to heart

There is no doubt that these dogged entrepreneurs are living on hope and aspiration. Katie works 30 hours a week, while Luke is full-time and saddled with debts from a previous failed venture. Christmas gifts were covered by credit cards that have yet to be paid and the pair must live vicariously through friends when it comes to trips or shelling out for that fancy new smartphone.

Katie, however, focuses on the upside of having to monitor and curtail expenses.

“It’s made me a bit of a minimalist in a way,” she said. “I’ve sold a lot of my things and live much leaner and without any clutter. If you’re bootstrapping, any spare dollar you earn either from your day job or (any other source) is invested back into the business.”

Lack of a cash reserve keeps them working around the business, which requires a great deal of self-discipline. But the siblings realize that, as CommentAir moves along, they will at some point need to make a choice and commit to building the business full time.

Stuck between the chicken and egg

At present, the development of their prototype, by a student team at Algonquin College, is being funded through Ontario’s FedDev program. However, that funding will run out at the end of this month.

Luke’s previous experience as an entrepreneur has left him wary of taking out loans and led him to set hard performance targets for the business before he is prepared to do so again.

“The criteria being that we have to have customers, and out of those customers 80 per cent are not serious so you have to be able to survive off 20 per cent of the customers,” he said. “If you can’t survive, then don’t take the loan because your business will fail. This isn’t being risk averse, it’s just being realistic.”

Instead, the siblings have relied on friends and family money and networking to tap into grant programs and government sources. While this “pay as you go” strategy has prevented CommentAir from accumulating any debt so far, it nonetheless leaves the business with a big question mark about where to turn when the FedDev funding dries up.

“It really depends on what we have when our contract ends with Algonquin” in terms of a working prototype, Katie said. “It’s a pretty big turning point where we decide to continue pushing or put CommentAir on the back burner.”

“I have talked with friends and people I know who have money and they’re definitely in, once they see a product,” added Luke. “It’s always ‘until then, let me know.’”

Bumps in the road

A working prototype is crucial to securing the initial stadium contracts which will provide the market validation to make investors and lenders take notice.

The project with Algonquin College was intended to produce the prototype. However, the siblings have been frustrated by a lack of progress and missed deadlines which have left this outcome in doubt.

“Everyone always wants to see a working product in hand before they’ll give you the time of day,” Luke said. “If something comes out of working with Algonquin, we’ll go from there. If not, we’ll re-evaluate and possibly have to accept that we may have to start a new path.”

In our last instalment, we talked about how the priority from a talent perspective is to bring on board a technical co-founder. The siblings agree that the challenge of getting the job done with a student team has illustrated the need to fill this position quickly.

“We’re really starting to see that we desperately need a technical cofounder to jump in and say ‘give me what you have so far, I’m going to build this in a week,’” Katie said.

Meanwhile, the duo keep plugging away. Katie is out there doing what she does best – hustling through her network of contacts and at various networking events to find new supporters and funding programs.

“One thing I have learned is how Katie’s networking skills can find the necessary industry connections to make things happen,” Luke said. “It’s a marketing thing that is going to be very useful in the future in whatever projects we do.”

A recent highlight has been Katie’s nomination for a Bootstrap Award, offered by local startup incubator Exploriem.org.

“It’s nice to know that people see our business as valid,” Katie said. “We have an OCRI event coming up to showcase the business and I’ve been attending a lot of other startup events as well. You have to be careful not to spend all your spare time socializing, but picking and choosing what to go to and which connections to make to find the help you’re looking for.”

In our next instalment, we will take stock of CommentAir’s funding challenges, the continued viability of the venture and what strategies have worked to attract the funding it has secured to date.

Technorati Tags: wireless technology, earpiece, commentator, professional sports, stadium, CommentAir. Algonquin College, startup, entrepreneur, founder, co-founder, bootstrap, prototype, FedDev, team building, recruitment, co-founder, Exploriem, OCRI, hustling

Giving your team ownership

This is the fifth article in a continuing monthly series chronicling the growth path of Screenreach Interactive, a startup based in Newcastle upon Tyne in England’s North East. Screenreach’s flagship product, Screach, is an interactive digital media platform that allows users to create real-time, two-way interactive experiences between a smart device (through the Screach app) and any content, on any screen or just within the mobile device itself. We invite your feedback.

By Francis Moran and Leo Valiquette

In our last post, we looked at how Screenreach Interactive is managing its beta testing process to prepare for the launch of a new version of Screach in the near future. We focused on the logistics of soliciting, encouraging, filtering and interpreting user feedback to fine tune and debug the new app.

But working toward a deadline and ensuring that all of the pieces fall into place is about much more than technical and logistical details. Perhaps the most important variable to manage is the human factor. Individuals from different parts of the organization, each with their own role and responsibilities, must work together collaboratively and appreciate the needs and priorities of their peers.

“We are fortunate to have a team that is more interested in achieving an ultimate common goal than focusing on their own interests,” said Screenreach CEO Paul Rawlings. “Decisions must be made based on what’s best for the product and the collective.”

In this post, we’ll look at how the beta testing process is coming along and how the Screenreach team has learned to keep everyone rowing in the same direction.

Assessing the feedback as a team

In the last post, we described two different third-party platforms that Screenreach is using to help manage the beta testing process. The first is Test Flight, a free web service that provides developers with an easy means to distribute their beta apps for testing. The other is Get Satisfaction, an online platform for brands to host their community of users, interact with them, and collate the feedback.

To quickly and easily disseminate the data, the Screenreach team categorized the feedback from Get Satisfaction based on whether it was related to bugs, functionality, user experience, design or was simply a content-based suggestion.

Assessing the feedback involved the whole Screenreach team. As marketing manager Sarah Athey pointed out, “the whole team had already been involved in engaging with the beta testers so many of them already had a good understanding of the feedback we’d received.”

This is important. Preparing and launching a product touches every aspect of an organization, from sales and marketing to technical support.

“We place a big emphasis on the whole team having ownership of the product, so for us it’s essential that everyone is involved,” said Robyn Lingard, head of operations. “We only ever take decisions to small groups once the discussion has been narrowed down and refined.”

However, this approach doesn’t come without its challenges, not the least of which is keeping the process from getting bogged down.

“When things like this are discussed you have to be aware that each department is looking at the suggestions with more of a design, development, or marketing eye based on their expertise,” Lingard said. “Although this can cause conflicting suggestions, it’s vital for getting the overall picture and coming to those decisions together based on these different perspectives.”

Crunching the data, making the decision

Once priorities have been set through this team process, the senior team looks at the themes which have emerged that impact on the technical aspects of the app. They must consider what changes in functionality and design should be made and what impacts this will have elsewhere. Always, the emphasis is on looking at the final product from the end-user’s point of view.

“Then it’s time to get down to the real work,” said Lingard.

Lingard, along with Screenreach’s account manager, created an action plan for the whole team based on what the senior team decided. To help manage the process, Screenreach uses another third-party platform, a project management and online collaboration software called Basecamp.

With the launch of the new version of Screach only weeks away, the team is busy working through final changes and testing them along the way to resolve any issues early.

“In all of this, it is very important for us to be aware of what our individual roles are and how they have to complement the work and objectives of our colleagues,” Lingard said. “When working to such tight and precise deadlines it is essential that everyone is working in sync.”

Lessons learned

Early on, the team encountered some challenges in this regard. Messages would get miscommunicated within a group that included highly technical individuals and those who were less so.

“We realized this early on in the process and had to step back and realign,” Lingard said.

Openness is crucial. Screenreach has a very strong collaborative team culture and full team meetings are used as a forum in which every individual is encouraged to discuss how work is being managed, how they are coping and how effectively the team is functioning. These meetings will often erupt into brainstorming sessions with unexpected benefits, such as a developer coming up with the solution to a marketing problem, or one of the sales teams solving an issue for the design team.

“I think many people can shy away from such openness but by always agreeing that we are all working towards the same ultimate goal, we accept that we have to constantly adapt to achieve this,” Rawlings said. “What worked for us as team three months ago will almost certainly not work in the same capacity today. We’ve found that by regularly changing our approach – and never our goals – we are evolving as a team as much as our product is.”

While the team has had challenging times over the past few weeks, Rawlings emphasizes the importance of taking advantage of those times when things go wrong to sit back, assess what’s happened and speak frankly to clear the air.

“It’s easy to put issues to one side while preparing for a launch, but actually they are what determine whether you make it through or not,” he said. “We’ve always actively encouraged team members to raise any issues they have.”

Of course, unforeseen hiccups do arise, such as a recent incident in which a key team member came down sick and everyone had to scramble to pick up the slack and keep things on track. But in Rawlings’ view, if someone is struggling to meet their targets despite their best efforts, it is a symptom of a deeper issue.

“We’ve learned that, without a doubt, any problem is never one person’s fault or responsibility,” he said. “If someone is struggling to make a deadline then we need to look back through the full production chain and assess why this might be. Doing so will perhaps raise two or three areas for improvement across multiple departments. Then we can act on these.”

In out next instalment, we will catch up with the team post-launch to see how it turned out.

Technorati Tags: Screenreach, Screach, beta test, beta tester, Test Flight, Get Satisfaction, Basecamp, Paul Rawlings, Sarah Athey, Robyn Lingard, startup, entrepreneur, mobile app, mobile device, download, engagement, project management, team, leadership, team collaboration, brainstorm

Preparing for a major offensive

This is the next article in a continuing monthly series chronicling the growth path of NanoScale Corporation, a growing nanotechnology company based in Manhattan, KS that is commercializing various advanced materials and compounds for improving indoor air quality, removing pollutants, and containing and neutralizing hazardous chemicals.

By Francis Moran and Leo Valiquette

When we introduced NanoScale Corporation a month ago, we talked about how the company is faced with the challenge of expanding into a conservative market wary of new products or technologies which represent a significant departure from the tried and true.

That market is the civilian disaster restoration market, where contractors work to repair, remediate and decontaminate commercial and residential properties damaged by fire, storms, water, sewer backups and mould. In North America alone, this market is worth hundreds of billions of dollars. It is a steady market sheltered from general economic volatility given that disasters and accidents happen all the time and the cost of restoration is typically covered by an insurer.

Over the past year, NanoScale has focused on laying the groundwork for a strong market push in 2012. In this post, we will explore, with marketing director Kyle Knappenberger, how the company plans to move forward over the next 12 months and overcome what can often be a new market entrant’s greatest competitive threat – the status quo.

Getting the customer to take notice

While NanoScale is expanding into products which help the average property owner improve indoor air quality, its line for the disaster restoration market isn’t sold by your local hardware or home improvement retailer. These are commercial-grade products for use by contractors who buy their supplies from specialized distributors.

This puts the company in a rather unique, and challenging position – it is marketing products derived from innovative, and proprietary, nanotechnology research, to end users who are unlikely to be impressed by a sales pitch that focuses on the wow factor of such cutting edge innovation.

“We really need to balance that and not complicate the sale by overhyping the ‘nanotech’ aspect,” Knappenberger said. “Instead, we have to focus on the benefits of the product and how it can help an end-user who is likely to be an old-school building contractor.”

That means a proactive and ongoing effort to educate people at every level of its distribution channel on the benefits of its products. The need to have its marketing messages clearly defined and embedded within the minds of its distributors and affiliated retailers has become even more acute as NanoScale prepares to expand its sales territories.

NanoScale sells its products to the disaster restoration market through a national distributor which acts somewhat like a wholesaler. This partner has approximately 20 corporate and 50 affiliate retail locations which sell to contractors.

“We support all of these retailers in the field with training and education events,” Knappenberger said. “It’s a pretty traditional sales and marketing model that relies on building relationships and educating these retailers to become champions who will push the product to their customers.”

Mustering more manpower

NanoScale has the U.S. broken into five broad regions and is already active, through this distribution channel, in three – the west, southeast, and midwest -areas. It has focused on these areas first because of higher population densities which allowed it to cover more territory with fewer people. These regions have been divided between Knappenberger and two colleagues and managed from NanoScale’s head office in Kansas. This has meant a lot of time on the road, a particular challenge for Knappenberger, who has other operational responsibilities at the company. For 2012, NanoScale’s plan is to expand through its distribution partner into the two remaining regions, the northeast and the Texas area.

To date, its expansion strategy has been governed by several key factors:

Where its distribution partner has a physical presence.
Where population density ensures a sufficient volume of sales.
Where insurance practices don’t prove to be a hindrance – in some geographic markets, even where there may be sufficient population density and a clear need for disaster restoration services, demand is low because the cost of a restoration isn’t covered by an insurer.

Manpower is the greatest challenge as NanoScale prepares to expand into its two remaining regions. From having worked with retail distributors in its three initial regions, Knappenberger and his colleagues have developed a clear understanding of the sales resources they need on staff.

“So far the three of us have focused on about 30 retail distributors at a time – we know one account manager can only adequately serve about 10 to 12.”

Not only does NanoScale need more people on staff at its head office, it needs to recruit, train and support more representatives in the field in cooperation with its distribution partner.

“We’re in the process of looking for candidates,” Knappenberger said. “We don’t have a specific requirement that they have experience in this industry, but we do want experienced sales people who we can train and instil in them our perspective on serving this market.”

That old-school crowd is learning some new tricks

Meanwhile, the marketing team continues to explore new ways to reach out to, and educate, the end users of its products. In our first post, we noted that NanoScale hasn’t yet engaged in any focused public relations activity. So far it has only advertised in the few significant trade publications intended for disaster restoration contractors. From Knappenberger’s perspective, there are too few niche publications serving this market to yield significant PR traction.

LinkedIn, however, has proven to be an effective channel for engaging with contractors and has yielded more sales leads than NanoScale’s magazine advertising.

“We’ve been surprised by how many contractors are on various industry forums through LinkedIn, but Twitter and Facebook, not so much,” said Knappenberger. “My sense is that more contractors are engaging with their peers for resources and information than looking at those few industry publications. So we have been focusing on this social media platform in cooperation with those distributors who have a lot of connections on LinkedIn.”

Facebook is a popular platform among many contractors, he said, but it’s primarily used to engage with customers and advertise in community, rather than engage with peers.

Knappenberger acknowledged the opportunity, and the need, for the company to plan ahead and consider how it can raise its profile among property owners. It has developed a marketing kit for contractors to use with property owners, and intends to target the consumer market later this year.

“There’s a lot of discussion in the media about the products people are using in their homes, which is raising awareness of health concerns and a desire for safer, less toxic alternatives,” he said. “There is also an opportunity for us to respond to the growing issue of chemical sensitivity.”

When looking at products and supplies, disaster restoration contractors are accustomed to seeing before and after pictures that tell a story. But with NanoScale’s products, it is difficult to illustrate an odour. In our next instalment, we will discuss the challenges of marketing and selling a product that can’t be presented to potential customers in the manner in which they are accustomed.

Technorati Tags: NanoScale, OdorKlenz, nanomaterials, nanoparticles, adsorbents, disaster restoration, restoration contractor, decontamination, remediation, sales, marketing, pollutant, contaminant, air quality, sales channel, franchise, distributor, Kyle Knappenberger, chemical sensitivity, social media, LinkedIn, Facebook

Dealing with the devilish details

This is the third article in a continuing monthly series chronicling the growth path of Genevolve Vision Diagnostics, a life sciences startup based in Albuquerque, NM that is commercializing cutting edge genetic research to develop new diagnostic tests and gene therapies for colour blindness.

By Francis Moran and Leo Valiquette

According to Matt Lemelin, CEO of Genevolve Vision Diagnostics, there are more than 100 occupations which rely on workers having normal colour vision. As we explored in our last post, civilian and military aviation, where there is no room for error, ranks high on this list. Job performance and passenger safety depends on pilots, air traffic controllers and many other technical and support personnel having full colour vision.

It’s easy to understand, then, why Lemelin is filled with such enthusiasm for Genevolve’s prospects when he hears the United States Air Force state that “no colour vision test currently on the market delivers what the Air Force requires.”

“We are very excited about the possibilities of working with the Air Force and other governmental departments,” he said. “We have a fairly complete understanding of their needs in regards to colour vision and we feel we have a turnkey solution to resolve their longstanding issues.”

The challenge, of course, is to bring to market a compelling product that is protected by a rigorous intellectual property (IP) strategy and has garnered the regulatory approvals and industry praise to attract the interest of such a flagship customer. In this post, we will take a look at Genevolve’s product development, IP strategy, business plan and how venture capital does, or does not, fit into the picture.

Finding the right partner … and the right terms

While the ground-breaking genetic research that underpins Genevolve’s value proposition is ultimately intended to treat colour blindness on a commercial scale, the company is first bringing to market the Eyedox Genetic Test for Color Vision – a first step toward creating a global colour-vision standard for all occupations.

“We have identified significant market pain,” Lemelin said. “Everyone who has a colour-vision deficiency needs and deserves to have accurate information about the nature of their colour vision. Unfortunately, even highly trained optometrists and ophthalmologists are unable to objectively discuss colour vision deficiency with their patients because of a lack of a proper diagnosis.”

But solving this market pain takes laboratory work—a lot of costly laboratory work. In the typical life science scenario, a startup such as Genevolve would secure a VC round and yield some control and ownership to the investor for the cash it needs to set up its own lab. Lemelin, however, has opted instead to establish a partnership with a third-party certified facility, rather than surrender control of Genevolve’s destiny.

To the best of his knowledge, this partnership is as rare as it is innovative.

“We have established a rather equitable multi-year agreement with one of the most recognized laboratories in the world,” he said. “We were not interested in a joint venture or a formal partnership, thus we worked out a royalty-based agreement taking lab costs into consideration.”

As usual, the devil is in the details.

“When partnering with others, both parties must benefit and any deals made should be mutually beneficial or the partnership will not work. You also want to avoid anything being too lopsided favouring one party over the other.”

To that end, Lemelin negotiated who would handle what share of the logistical and marketing costs to ensure both parties had a vested interest in a successful outcome. While the lab is responsible for the bulk of the logistics around clinical development and Genevolve’s market development, both parties share obligations related to the marketing effort.

Covering your assets

But the most important details of the partnership relate to ownership of IP. As we explored in the first post, Genevolve has an exclusive world-wide licence to commercialize the genetic research of husband and wife team Jay and Maureen Neitz and their colleagues at the Eye Institute of the University of Washington in Seattle.

“IP protection is a major issue in partnering with others,” Lemelin said. “In our case, the key patent which encompasses our genetic discoveries is broad and exclusive but it needs to be clear who is bringing in the IP. And who owns any new IP if any is developed. We are constantly working to build the company’s IP portfolio through additional patents, trademarks and copyrights.” However, at this stage, he is reluctant to reveal too much about the strategies Genevolve has instituted to protect its IP.

One of the greatest risks with trying to commercialize a patent related to a body of research that continues to evolve is the fate of the inventor. In Genevolve’s case, that risk is mitigated by the fact that its IP was developed by a duo supported by a research team that has amassed a large amount of clinical data—at this point, the loss of one individual will not derail the entire venture.

Too often, however, this is not the case. For those startups that are dependent on the grey matter of one person, Lemelin offers this advice:

“Get to market FAST!” he said. “Have a contingency plan for every possible event. Do not make major changes and keep it as simple as possible. Learn every detail possible about the IP in case you are forced to pick up unforeseen slack. Do appropriate technology assessment and have multiple potential paths to market … and insurance coverage can be a possible solution to provide further financial protection for the company and investors.”

The business of health

Genevolve is itself pursuing two primary paths to market:

Physicians: Physicians are enrolled through a variety of hooks, including exclusive agreements, patient pipelines, free test kits and the promise of getting a competitive edge by offering improved patient care.
Occupational departments: This comes back to those 100 or more occupations which rely on normal colour vision, requiring employers to accurately test their employees. Genevolve is developing specific tests to meet specific occupational requirements.

“We continue to develop distribution partners, not only through our existing global broker network from our laboratory partnership, but with major players like McKesson (one of the largest pharmaceutical distributors in North America), and with companies that develop colour-vision aids with the goal of adding value to our product,” Lemelin said.

An important aspect is qualifying the test for health insurance reimbursement.

Genevolve’s colour-vision test falls into the category of molecular diagnostics, which can qualify for reimbursement through a complex pricing and fee schedule that uses “stacked codes.” These codes are used to tally up the costs associated with each step that is required to carry out the test, as well as the technology involved. A new test must go through a long and complex process to have new codes created and qualify for long-term insurance reimbursement.

“The process of getting a new code can take years,” Lemelin said. “To begin the process, you must prove a need by demonstrating national acceptance of the test. This process is best described as establishing reasonable use or, more generally, clinical utility. It then would be critical to establish a value-based service that can be economically and medically justified.”

For Genevolve, this means validating the test by securing analytical articles in peer-reviewed publications and demonstrating that its test has become an accepted standard of care through physician testimonials and rates of adoption. However, molecular diagnostics is such a new field, said Lemelin, that there is not yet a standard in place that provides Genevolve with a target adoption rate to aim for.

As we mentioned in our last article, Genevolve is planning to make a big splash at the annual meeting of the American Academy for Pediatric Ophthalmology and Strabismus in March. An impressive showing here could spark the endorsement and early adoption from the broader medical community Genevolve needs to kick start the process of qualifying for insurance reimbursement.

Lemelin has already received positive feedback from practicing clinicians which has him optimistic that Genevolve will secure adequate physician adoption rates. The company also has a practicing optometrist as an investor, which lends further credibility with other physicians.

To VC … or not

Another risk factor facing the business is U.S. President Barrack Obama’s new health care plan, which threatens to tighten the rules governing what qualifies for insurance reimbursement. While Lemelin remains confident that he will be able to meet reasonable usage requirements and show sufficient physician adoption rates to qualify for reimbursement regardless, the Obama plan does create a measure of uncertainty in the market that has many investors wary.

And while Lemelin has always been reluctant to yield control to a venture capitalist, the fact of the matter is, the costs of getting the test to market requires an investment too small to attract the interest of many VCs. In addition, most are not interested in what they deem to be a “service” business. The next step for Genevolve – bringing to market a genetic treatment for colour-vision deficiency – would likely have greater appeal to a VC, but this would still mean surrendering control of the business to secure an investment.

Instead, Lemelin prefers to stick with a more measured approach and seek out the support of private investors. A private placement is another possibility. Once revenue is flowing in from the test, it will provide the capital Genevolve needs to forge ahead with bringing its genetic treatment to market.

“I prefer to commercialize the test, gain the credibility from this major achievement and approach our developing physician network and continue to pitch private investors along the way,” he said.

If all goes according to plan, it will begin with that medical conference in late March. In our next instalment, we will take a look at how the stars are aligning for that launch, the insurance reimbursement system in the U.S., and Genevolve’s contingency plan in case of reimbursement denials.

Technorati Tags: Genevolve, Eyedox, Matt Lemelin, colour vision, color vision, colour blindness, color blindness, genetic test, eye care, optometrist, startup, life sciences, biotech, marketing, marketing strategy, venture capital, VC, investor, private placement, insurance reimbursement, clinical use, vision clinician, aviation, airline, pilot, air traffic controller, IP, intellectual property, patent, stack codes, Obamacare, American Academy for Pediatric Ophthalmology and Strabismus, AAPOS, pediatric ophthalmologist

Wanted: Partners willing to take a leap of faith

This is the fourth article in a continuing series chronicling the growth path of CommentAir Technologies, a startup based in Ottawa, Canada. CommentAir is developing a wireless technology fans can use at sports venues to receive the same real-time commentary as fans watching from their televisions, a wireless technology that also creates a platform for targeted consumer interaction. We invite your feedback.

By Francis Moran and Leo Valiquette

In our last post, we spoke to Katie and Luke Hrycak, the sibling founders of CommentAir, about their challenges as technology entrepreneurs who do not have a background in technology. A process of self-education and aggressive networking to tap into the expertise of supportive advisors and mentors has been key.

The need to seek out external business and technical expertise of course extends to the team they must build to move CommentAir along. As a bootstrapped startup, they must not only find individuals who compliment their own strengths and weaknesses, but also share their passion and are willing to put in long hours without a regular pay cheque.

In this post, we take a closer look at what the siblings have learned about themselves, about building strong teams and how this must be applied to the business.

Who should be the next hire?

CommentAir took flight in early 2010. As we explored in the previous post, Zhu Li, a PhD candidate in wireless communication at Carleton, became Katie’s technical advisor and, now that he has returned home to Hong Kong, is on deck to serve as the company’s Chinese connection when the product is ready for mass production. (However, he has yet to join the company as a founder or employee.) CommentAir has also enjoyed the support of Carleton University professor Tony Bailetti and Ed Strange, coordinator of applied research and investigator of special projects at Algonquin College, who put together a student team with funding through Ontario’s FedDev program to work on CommentAir’s prototype.

While Luke and Katie have secured the support of a number of other advisors and mentors, their first true hire came this past summer, when they brought on board as chief designer and project manager Andrew Lowe.

“I went to go talk to him about manufacturing and plastics, and he liked the idea so we offered him equity in the company for his designs and knowledge on manufacturing and electronics,” Katie said.

For 2012, Katie and Luke are planning to add a technical cofounder as they work toward major field tests this summer.

“We need someone like this as soon as we start getting to either some major first tests or before a launch, because technical things are going to go wrong and it’s out of our knowledge base to fix them,” Katie said.

“I would like a telecom or electrical engineer, preferably someone who has many others to vouch for their work ethic and projects,” she added. “They have to also enjoy sports and understand why we are doing what we want to do. An entrepreneurial mentality isn’t a top priority, but definitely a creative mind that can work around unforeseen problems. It’s also important that it’s someone we can get along with.”

But there is a clear distinction between getting along with someone and always being in agreement with them.

“You won’t always see eye-to-eye with your team, and that’s a good thing,” Katie said. “Same goes with informal advisors and partners. It’s all about having different perspectives and taking them all into account. If you have anyone telling you the same thing as you’re thinking, that’s not good.”

“If they aren’t adding value, cut them loose,” Luke added. “Don’t wait and don’t look back. Trust your gut.”

What distinguishes a co-founder or partner from advisors, mentors?

“A partner is someone who is willing to get more involved in the day to day, and bring value beyond just advice,” Luke said. “They’re bringing a skill or trait that we lack, such as the technical know-how, or something to get us to the next stage.”

Or, to put it another way:

“Co-founders and team members are meant to cover each other’s butts when your reputation and product are on the line,” Katie said. “There are always people who will love your idea, but that doesn’t mean you should bring them on.”

But sometimes, an ideal team member may present themselves unexpectedly.

“Sometimes a team member will just fall into your lap, so always keep your eyes open and have in mind a checklist of what you want to add to your team,” she said. “If they believe in your idea and in you, they will come on for equity if you’re bootstrapping and not even question if there is a salary.”

Finding the right people depends on your qualities as much as theirs

Katie readily acknowledges that her greatest weakness as an entrepreneur is lack of life experience, something which cannot be acquired in a university lecture hall.

“Every single meeting or conversation I’ve had with a mentor has left me pretty much floored in just how much I don’t know but should, and how much work I have left to do,” she said. “In order to get over this, I’ve had to self-educate to become an expert in my areas of interest as well as in the business I want to run.”

On the other hand, she considers her greatest strength to be her people skills, which she has already used to her advantage to win advisors and mentors willing to share their expertise.

Luke, on the other hand, has come to realize that his biggest weakness is “assuming any obstacle can be overcome quickly, when in reality, it takes a while to overcome it. My strength is just the perseverance to keep at it over time.”

While they believe their strengths will serve to create a strong and close-knit culture in the business as it grows, they both agree that the best way to overcome their weaknesses is to seek out the input of others before making decisions.

“If we can do this bootstrapping and without having to take money from anyone, that’s the way we’re going to do it,” Katie said. “Keep it in the family and just build relationships with mentors to get the expert advice we need.”

Thinking about the future

While the expert advice they need may someday require bringing on board a savvy investor for a share of equity, Katie and Luke are not yet willing to give up that degree of control.

“It can obviously be beneficial to have someone hands on overlooking the entire operation,” Katie said. “I just don’t think we’re there yet so I haven’t put too much thought into who I would want to invest in us. Would I turn down money if the investor fit wasn’t right? We’ll cross that bridge if we get there!”

Meanwhile, the siblings are intent on building a business with the staying power to continue on without them.

“Some entrepreneurs just want to make big money and go retire on a beach, so they build their companies that way,” Luke said. “In our case, we want to build something that will continue on without us, but we will want to always have a hand in it. We want to take what we build and continue on to grow other businesses as well.”

In our next instalment, we will explore the challenges of paying the bills on a bootstrap budget.

Technorati Tags: wireless technology, earpiece, commentator, professional sports, stadium, CommentAir, Lead to Win, Carleton University, Algonquin College, startup, entrepreneur, founder, co-founder, bootstrap, prototype, FedDev, Tony Bailetti, Ed Strange, chief designer, project manager, advisor, mentor, team building, recruitment

Putting your assumptions to the test

This is the fourth article in a continuing monthly series chronicling the growth path of Screenreach Interactive, a startup based in Newcastle upon Tyne in England’s North East. Screenreach’s flagship product, Screach, is an interactive digital media platform that allows users to create real-time, two-way interactive experiences between a smart device (through the Screach app) and any content, on any screen or just within the mobile device itself. We invite your feedback.

By Francis Moran and Leo Valiquette

In our last post, we looked at Screenreach Interactive’s recent inroads in the radio and television industries, including its appearance on Popular U.K. television program The Gadget Show at Radio Festival, Europe’s top radio industry event, and its new “experience” for long-running U.K. current affairs program Dispatches.

But making a splash at major industry events and with high profile clients demands one thing – a compelling product. But a compelling product can’t be developed in a vacuum; it must address a clear market demand. As we have emphasized time and again on this blog, marketing and product development must work together from the get go. To quote guest commentator Ronald Weissman, “Great companies constantly test the market, for validation and feedback.”

The team at Screenreach has taken this to heart. With a new version of the Screach app expected to launch in February, every effort is being made to solicit input from beta testers and prospective users. In this post, we’ll look at how Screenreach approaches the beta testing process, what third-party tools it has found to make life easier and the lessons it continues to learn along the way.

In beta with social media

While the team is reluctant to reveal too much about the new features and functionality that will be included in the new version of Screach, it is safe to say the app has been in a constant state of evolution since its launch in the summer of 2010. Market feedback has been fundamental to the process, with social media emerging as a primary means to attract and engage with users.

Screenreach’s blog has proven to be a useful tool and this time around, the lure of winning a MacBook Air is an added incentive. But building a community following on Twitter has been fundamental to mustering a strong and outspoken group of testers. The team has built its following by getting involved in specific industry conversations on Twitter and constantly discussing Screach through the micro-blogging platform.

“There is a need to strike a balance between too few and too many beta testers,” said Screenreach CEO Paul Rawlings. “Realistically, you may have a lot of people signed up for beta testing but experience has shown us that only 25 percent of those will actively download the app and provide feedback – perhaps even less. So from that point of view you need to account for drop off.”

The mobile platform being tested also impacts how large the group can be. At this stage, Screenreach is only testing the iPhone version and Apple limits beta tester groups to 100. Google, on the other hand, imposes no such limitation for the Android.

Finding the forest among the trees

It’s one thing to build a strong community of beta testers who are willing to provide useful feedback and quite another to manage the logistics of all that crowd-sourced input and distil it into meaningful data. For that, Screenreach has found two useful third-party tools.

The first is Test Flight, a free web service that provides developers with an easy means to distribute their beta apps for testing. For the Screenreach team, there just isn’t anything else comparable.

“TestFlight has proved to be a useful tool for us, it has a great dashboard and organizing tools,” said Rawlings.

However, its current version does have one drawback.

“One problem we have experienced with TestFlight is that it only allows you to assign one account to your device which has posed problems when a beta tester has previously registered another account,” said Rawlings. “It means they have difficulty swapping the accounts over – this was something we were already aware of and could help the testers resolve but it’s definitely something you need to be aware of. Anything that inhibits the tester from downloading the app as quickly as they need to obviously isn’t great.”

The other tool is Get Satisfaction, an online platform for brands to host their community of users.

“We looked around at a number of tools that could be used to collate feedback on the new app and we chose Get Satisfaction for a couple of reasons,” said marketing manager Sarah Athey. “First, we really liked the way it allows a user to categorize their posts, it means we can manage feedback based on whether it’s a question, idea or problem. It has useful admin features too, such as a management view which helps to track and stay on top of all your posts.”

The Screenreach team never really considered handling these kinds of logistics in house.

“Third party apps like Get Satisfaction are good at what they do and make it easier to categorize feedback topics and assign the best team member to respond to a specific question, problem or idea from a tester,” Athey added. “It also creates a forum for testers to compare notes with each other and for the whole team to get involved in these conversations.”

In some instances, however, nothing beats good old fashioned face-to-face contact. While Get Satisfaction has proven effective for engaging in conversations through online forums, the Screenreach team has still found it useful to hold focus groups for feedback on the Screach experience for versions that have been customized for a specific market vertical, such as television programming.

“We’ve also had a couple of testers who have really gone the extra mile and their fresh perspective on Screach has been fantastic, so we’ve thought about inviting them in to meet the team and see the impact their feedback has made,” said Athey. “Some of the testers put a lot of their time and thought into the process and we’re very grateful for that.”

Lessons learned

Despite the benefits of using social media and specialized third-party tools, the team has found that the process can be more complicated than expected, with a host of small details to manage around the release to ensure the install of the beta version is as painless as possible for testers.

“One thing we’d say is make sure you have the full team involved in the process. Everything that comes out of this involves just about every aspect of the organization,” said Rawlings. “It’s also an interesting way to generate new ideas within the team. We’ve always placed great emphasis on every team member being deeply involved in the user and client perception of Screach so this is an important part of that.

“For example, your developer needs to be ready with the technical aspect of things but this has to be correctly communicated to your marketing person for them to translate that message to the user. Then there will be feedback that revolves around design or bugs or product questions in general – you need to have all of the correct people on board to answer these questions.”

One risk the Screenreach team took was opening beta testing during the holidays.

“We took a bit of a risk, but as it turned out, it meant our core testers had free time on their hands to get more actively involved,” said Rawlings. “You need to be aware of things like this.”

The important thing, Rawlings added, is to immerse yourself in the feedback that you receive by asking followup questions to understand the thought process behind why a beta tester is making a specific suggestion.

The learning process never ends. The new version of Screach will soon be pushed out to Android beta testers, which promises to provide a whole new flood of feedback given the growing variety of Android devices that are now available.

“We’re aiming to launch in February so things are very full on at the moment and the beta tester feedback is at the heart of everything we are working on,” said Rawlings.

In our next instalment, we will take a closer look at the launch efforts for the latest version of Screach, provided, of course, that the team’s best-laid plans do not go astray.

Technorati Tags: Screenreach, Screach, experience, beta test, beta tester, Test Flight, Get Satisfaction, Paul Rawlings, Sarah Athey, startup, entrepreneur, mobile app, mobile device, download, engagement, digital media, radio, television, The Gadget Show, Dispatches, Radio Festival, blog, Twitter, online community, social media

When selling yourself as faster and cheaper is no longer enough: Part 2

This is the fifth article in a continuing series that will feature case studies and anecdotal stories from entrepreneurs, consultants and veteran marketers about their efforts to develop, implement and measure marketing programs to bring technology to market and grow market share. We invite your feedback.

By Francis Moran and Leo Valiquette

In Part 1, we introduced Host Analytics, an enterprise software vendor that delivers a suite of corporate performance management (CPM) tools through a software-as-a-service (SaaS) model. We discussed how the company initially positioned itself as a “faster and cheaper” alternative to established competitors such as Hyperion – a vendor later acquired by Oracle from which many of Host Analytics’ founders had come.

By the late 2000s, Host Analytics had come to realize that its initial value proposition no longer represented the firm’s true value and wasn’t supporting its position as an emerging market leader. It needed to rebrand and reposition itself and take advantage of the fact that SaaS had begun to go mainstream as a delivery model for many enterprise applications and had found greater acceptance among finance professionals.

In early 2009, Ken Rosen, a corporate strategy and marketing consultant with Performance Works, engaged with company CEO Jon Kondo and VP of marketing Keri Brooke to determine the next step in positioning and marketing strategy. It quickly became apparent that old market assumptions could no longer be trusted.

Host Analytics embarked on a four-month program that included a sophisticated survey designed to get past trite answers and root out respondents’ deep-seated views on their jobs and their roles in their organizations. It started with penetrating, one-on-one conversations with dozens of customers and potential customers to uncover the most critical concerns and desires. It then validated these findings by targeting 30,000 decision makers, including VPs of finance, controllers and CFOs, with a survey that yielded more than 550 responses.

“This was a watershed moment for Host Analytics to decide to go ahead with something like this,” Rosen said. “But Jon and Keri realized the market was changing. Their company could no longer move ahead based on market assumptions that had come out of the relatively small number of companies capable of deploying a massive Oracle system. They needed to expand the market to deliver a new wave of growth while obviously keeping current customers happy.”

Business partner, not a bean counter

Four compelling themes emerged from the interviews and survey:

Senior finance professionals want to drive fact-based decision making across the organization and identified this as a core objective of the job. They want everyone in the company to understand the financial risks and rewards of decisions.
Finance professionals want a seat at the table for all significant decisions. They are not attempting to dominate other departments, but act as a peer among leaders at critical moments. While finance is always at the right hand of the CEO for financial decision making, this function within an organization is seldom involved in operational decision making. When it comes to marketing, sales and other business development activities, it typically has little more than budgeting role.
Finance professionals want to offer increased visibility into their organization’s overall performance at any given time. This focus, while more passive than those above, is the one most often associated with the category of corporate performance management.
Finance professionals don’t like to buy a product from a technology vendor. They want a tool or application explained by another finance person, or at least, by someone who is intimately aware of their specific pains.

“Prior to this, Host Analytics positioned itself to CFOs as a more economical alternative to Hyperion and a more efficient and accurate alternative to spreadsheets,” said Rosen. “But in many cases, this was not compelling enough to shift a CFO from the status quo. For example, many CFOs were of the view that ‘if my staff has to put in three extra hours to generate the report I want, so what, that’s part of the job.’”

The eureka moment

The survey results, however, revealed the true pain, and frustration, of many CFOs. Ironically, the features and benefits of Host Analytics’ CPM tools lay in this sweet spot, they just had not been positioned and pitched that way to senior finance executives. It was a matter of realizing that the company’s greatest product differentiation was exactly the thing that would resonate with this group.

“Host Analytics had always pushed the idea of better decision making,” Rosen said. “Its CPM tools were designed to help operational leaders understand the financial implications of a decision ahead of time and play around with how an income statement will look when various line items are added or removed. The idea is to reduce the uncertainty around trying to estimate or project the capital and operational costs of a big project, such as building and operating a new factory. While this is simple in concept, it is difficult to do on large projects.”

When the team took a step back, looked at the results of the survey, and held those up against the existing features and benefits of Host Analytics’ CPM products, the way forward became clear.

“The meeting Jon, Keri and I had to review the data and decide on a way forward literally lasted all of 15 minutes,” Rosen said. “Everyone was on board with how sales, marketing and product development had to work together to reposition and rebrand the company.”

Driving fact-based decision making across an organization and giving senior finance professionals a more strategic seat at the table for critical decisions became the core elements of the company’s new brand identity. Its new tagline is simply “Decide.”

Ironing out the kinks

The new messaging was first introduced in high-level presentations to analysts at finance conferences and among various new audiences not already familiar with Host Analytics. At the same time, there were the obvious logistical challenges of reflecting the new focus with a new logo, and distilling the new messaging into marketing collateral.

Significant time was needed to translate that marketing message into an effective and suitably segmented sales message.

“We had to expand the message to include very specific differentiators and case studies and those sales tools took time to collect and disseminate,” Brooke said.

“We had to spend more time than originally anticipated socializing the messaging with the sales teams until both organizations had it in our bones. As with any fast-growth environment, much of the learning was carried out on the fly,” she added. “The challenge with any sales team is they feed their families selling messages they know from past lives. We needed them to appreciate the company and personal benefits of switching gears instead of sticking with the original Host Analytics story.”

The results

But Host Analytics has overcome these challenges and Brooke has seen the results where it matters most. She has experienced firsthand a distinct change in how responsive audiences are to the new Host Analytics. Sales staff who use the higher level customer-focused message close more sales than those who use the old “faster and cheaper” pitch line.

Not only are they closing more sales, they are securing larger enterprise customers.

“We’ve seen a big increase in the selling price of deals, the size of the client organizations, and the level of the decision maker who wants to talk with us,” Brooke said. “And it’s due to the strength of that message of how we can help them become more of a business partner with the executive team of their organization.”

In the fiscal year after the new messaging and branding was implemented, Host Analytics’ revenues grew 250 per cent and have doubled again in the last fiscal year.

“Our market, meanwhile, is growing at a rate of 12 per cent,” Brooke said. “Even SaaS CPM, the fastest growing segment of the market, is growing at only 20 per cent a year. So we are growing five times faster than the fastest growing segment of the market.”

To Rosen, the results are gratifying, but not surprising.

“Even companies with the most consultative sales process – teams who work every day to listen to customer needs – simply cannot uncover the most deep-seated pains, hopes, and aspirations of customers,” he said. “This is because the customers themselves are on guard in selling situations and unwilling to truly expose what matters to them. It takes a non-selling, probing, often surprisingly personal discussion to get executives to open up. Host Analytics embraced an approach to get to this deeper truth and lever it in the market.”

Technorati Tags: brand, cloud, cloud computing, corporate performance management, CPM, decision making, enterprise software, finance, financial, Host Analytics, Hyperion, market leader, marketing, Oracle, Performance Works, SaaS, SAP, Software as a Service, sales, revenue, customers, fact-based decision making, decide

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Easymarketing : Entrepreneurship has become a way of life for those who creatively and innovatively make good use of informative research and ideas that are offered in the i...

David J. French : Good observations. Good example. Once you switch from lean to rich living, it is hard to go back. Ask any student.

Nick Stamoulis : It's important to look at what your competitors are doing, but not copy them completely. Just because they are doing something, doesn't mean that they are r...

Nick Stamoulis : Developing a social media community before launch is a good strategy because it's a way to get people excited about the upcoming product or service. Since n...

Alexandra Reid : I'm glad you found it useful, Emily. These roundups are a new initiative, and so it's great to hear feedback. - Alex.

Emily : Good day Alex, thanks for sharing this list of resources it really helps especially the "When IT meets marketing" article. Cheers!

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