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He Sold His First Business To Google And Just Raised $120 Million For His Next Startup

Ray Reddy

Ray Reddy has raised millions of dollars in startup funds, sold a company to Google and is taking on the local business gauntlet in an innovative new way. Yet, he chose to exit Google and Silicon Valley to launch his latest venture.

In his exclusive interview on the DealMakers Podcast, Ray Reddy shared the pros and cons of the valley and his fundraising strategies.

The Art of Business

Always curious, Ray wondered if business was like math and science.  He attended the University of Waterloo to study computer science, then a Masters of Business and Entrepreneurship and Technology.

He says he learned some good foundational principles, how to approach complicated problems, and how to learn quickly. Yet, when entering the business world he found that very little of what he learned had any practical knowledge of applicability. He says “it’s much more about common sense and experience than it is about definitive approaches and how to solve some of these problems.”

After school he went straight into corporate strategy at BlackBerry, doing M&A and venture investments. Yet, he has always not only had a lifelong craving for learning, but a passion for building something and building something that he found had a purpose.

What Google Gets about M&A

The mobile phone was starting to consume other portable electronics. It quickly began to absorb portable navigation, portable GPS, handheld units, and portable media players. Yet, no one seemed to be addressing it. Ray Reddy decided to go solve it himself and built a team of people to go after it.

That startup became PushLife.

Prior to the iPhone, they focused on building an experience that made it very easy for people to move content back and forth between their phone and their computers, specifically music. It took normal phones, and it gave them an iPod-like experience on Android, BlackBerry, and Nokia. PushLife ended up licensing software to major carriers.

It was so successful it was acquired by Google. After the acquisition, he was at Google for four years. First in the Canadian Google office in Waterloo. Then out in Mountain View at Google‘s headquarters.

He ended up running the mobile commerce team for one of their products. Then towards the end, Ray was actually part of the launch team for Google Shopping Express, which was their same-day delivery effort in retail.

The difference with companies like Google, according to Ray, is that they do hundreds of acquisitions a year. They really turn it into a mass production factory. It’s very organized. There are no games. They are very straight-up. From Ray‘s perspective, it doesn’t feel like anyone is trying to overly optimize a negotiation. It makes a lot of sense because the transaction is the beginning of the relationship.

Ray‘s opinion is that Google‘s M&A process is designed in a way to get a group of people that are energized and that deliver a lot of value over the upcoming years. Contrast that with some other acquisition approaches and the result is quite different.

Eventually, Ray found a big new problem to solve. He ultimately concluded that structurally, a big company wasn’t set up to solve this problem, even with all the resources a company like Google has.

Toronto vs. The Valley

Ray moved his founding team to Toronto. Not that the Valley isn’t a really interesting place. He says “On one hand, it is the capital of technology worldwide, but I think there’s also some really weird dynamics there.” The biggest one being that you’ve got a very high concentration of very wealthy people, and they’re all early adopters.

He points to the collapse of the entire on-demand space, everything from on-demand valets to cleaning services several years ago, and a massive false-positive from the Valley.

Because when you have places like Palo Alto where average household incomes are north of $2 million, you can fool yourself into thinking that there are enough people who will pay a big premium for convenience.

As Ray states, “the types of investors living in the Valley are not at all sensitive to paying a $10 delivery fee for having a $10 item brought to them.“ That doesn’t seem weird to them. When you look across average neighborhoods and cities in North America, that’s not necessarily true. You lose sight of that in the Valley. You lose sight of the average person.

Ray says “So, if you’re trying to build a mass market consumer product, you just have to be very careful of false-positives that can come from something working in the Valley“

Then the team went and looked at the reality of building talent there, and hiring, and cost, and a lot of those other things. They decided to move to Toronto instead.

Fundraising Strategy

Ray’s latest startup is Ritual which is a social ordering app that taps into networks of co-workers and colleagues for fast and easy pick-up and pay at a wide variety of local restaurants and coffee shops.

He has already raised $120 million in capital. Greylock led the Series A out of the Valley. Insight did the Series B out of New York. Georgian Partners led the C round out of Toronto.

Rather than waiting until funds are imminently needed to close a round, he says “I think about it differently which is you should always be talking to investors. Always having an ongoing conversation with investors.”

He’s always talking to the next stage of investors and trying to build that relationship. Fundraising comes down to trust, and do they trust your judgment? Do they trust that you can do what you say you’re going to do?

For Ritual, it’s never been about the investor that gives the highest valuation. It has been about who do you want to work with and who do you want to build this company with and spend time with.

He’s had a relationship with each one of those investors for about 9 to 12 months before the round. When it came time for fundraising, it was a no-brainer each time.

Today Ritual has a team of about 300 people globally.

Listen in to the full podcast episode to find out more, including:

  • The process of selling your company to Google
  • Benefits of launching in cities outside of Silicon Valley
  • Ways to build relationships with investors
  • Success factors behind marketplaces
  • Retention as the critical factor for ultimate success in business

Alejandro Cremades is a serial entrepreneur and author of best-seller The Art of Startup Fundraising, a book that offers a step-by-step guide to today‘s way of raising money for entrepreneurs.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley

Source: He Sold His First Business To Google And Just Raised $120 Million For His Next Startup

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Which Company Could Be The Next Permian Basin Acquisition Target?

Following the news that Chevron had agreed to pay a nearly 40% premium to acquire Anadarko Petroleum, investors quickly bid up the shares of other potential acquisition targets.

As I argued in the previous article, I believe the Permian was the key to the Anadarko acquisition, but there are plenty of other targets in the region. There are also several companies with the capability of making acquisitions.

In recent years, the few mergers and acquisitions in the oil and gas industry have been largely focused on the Permian Basin. The supermajor integrated oil and gas companies have been increasingly making forays into the Permian.

In addition to Chevron’s new acquisition, in 2017 ExxonMobil paid $6.6 billion to acquire Permian acreage from the Bass family of Fort Worth, Texas. ExxonMobil also spent $41 billion in 2009 to acquire XTO, which has a major presence in the Permian.

Permian Players

Today major acreage holders in the Permian Basin include the supermajors Chevron and ExxonMobil, as well as Occidental, Apache and Concho Resources. Occidental, in fact, reportedly attempted to acquire Anadarko prior to Chevron sealing the deal. But Occidental may now find itself in the crosshairs of a bigger player looking to shore up their Permian portfolio.

But there are many other major producers in the region, including ConocoPhillips, EOG Resources, Pioneer Natural Resources, Noble Energy, Devon Energy, and Diamondback Energy. Smaller producers in the region include WPX Energy, Parsley Energy, Cimarex Energy, Callon Petroleum, Centennial Resource Development, Jagged Peak Energy and Laredo Petroleum.

Let’s first take a look at the largest companies operating in the Permian according to enterprise value. This metric is preferred over market capitalization, because it includes a company’s debt. In the case of a potential acquisition, the acquiring company would be responsible for this debt in addition to the purchase price. Hence, it is a more comprehensive representation of a company’s market value.

I have included the integrated supermajors that could have the ability to make major acquisitions, three of the larger exploration and production companies (which could make an acquisition or be a target themselves), and Anadarko for comparison. All data were retrieved from the S&P Capital IQ database.

Metrics for major oil companies operating in the Permian Basin.

Metrics for major oil companies operating in the Permian Basin.

Robert Rapier

  • EV – Enterprise value at the close on April 12, 2019 in billions of U.S. dollars
  • EBITDA – TTM earnings before interest, tax, depreciation, and amortization in billions of U.S. dollars
  • TTM – Trailing 12 months
  • FCF – Free cash flow in billions of U.S. dollars
  • Debt – Net debt at the end of the previous fiscal quarter
  • 2018 Res – Total proved oil and gas reserves in billion barrels of oil equivalent at year-end 2018
  • EV/Res – The value of the company divided by its proved reserves

Potential Buyers

Based on their size and debt metrics, ExxonMobil and Chevron still appear to be the most capable of pulling off a major deal. Shell has been moving in the direction of becoming a natural gas company, and has already made major capital expenditures in this area in recent years. Further, in 2016 they made their own major acquisition — a $70 billion deal for BG Group.  Meanwhile, Total hasn’t shown much interest in the Permian.

BP may not have an appetite for an acquisition as it continues to be weighed down by its obligations from the 2010 Deepwater Horizon oil spill. As an aside, the continued fallout from that disaster has also resulted in BP having the cheapest reserves on the books by far of any company listed in the table. Also note that the EV/Res metric for integrated supermajors isn’t directly comparable to pure oil producers like Anadarko, as the former also have midstream and refining assets.

ConocoPhillips appears to be the most attractive target for an acquisition from a pure valuation perspective, but as the largest pure oil company it would be a large bite for even ExxonMobil. With respect to making an acquisition, ConocoPhillips CEO Ryan Lance stated earlier this year that the company isn’t feeling any pressure to do so.

Occidental also falls into the category of potentially making an acquisition or of being acquired. On a relative basis, they are more expensive than ConocoPhillips, but on an absolute basis the price would be more manageable.

What about smaller players like Parsley, WPX Energy, or Cimarex Energy? Based on the price movement following the announcement of the Chevron-Anadarko deal, investors are clearly betting that more deals will follow. Below are some of the metrics of potential acquisition targets (with Anadarko for comparison), including some of the large players listed in the previous table:

Metrics for smaller oil companies operating in the Permian Basin.

Metrics for smaller oil companies operating in the Permian Basin.

Robert Rapier

  • 1-Day Change – Change in share price on April 12, 2019, the day the Chevron-Anadarko deal was announced

Note that the double-digit gains of both Pioneer Natural Resources and Parley Energy imply that investors believe they could be next on the acquisition list. Parsley looks attractively priced according to its enterprise value and total reserves. Several other companies stand out, such as Devon Energy and Cimarex, although all of these companies outspent their cash flow in 2018. An acquisition by one of the larger players could give them the efficiencies and economies of scale to rectify that.

Another name on the list that stands out is Diamondback Energy, which has long been one of my favorite Permian Basin oil companies. Diamondback has been an outstanding performer in recent years, but now looks to be the most richly valued according to several metrics following its 2018 acquisition of Energen.

The biggest challenge with the smaller players is that they may not have enough reserves to really move the profit needle for the biggest players. Laredo Petroleum’s 200+ million barrels of oil and gas reserves might not be sufficiently appealing to ExxonMobil, which had 24 billion barrels of reserves at the end of 2018. But it could be appealing to a company like EOG Resources, which closed the year with 2.8 billion barrels of reserves.

Ultimately, price and valuation are only part of the equation. Anadarko wasn’t the cheapest acquisition target for Chevron, but Chevron liked the synergies of Anadarko’s locations. Thus, every major operator in the Permian is more likely to acquire companies whose properties are adjacent to their own. A deeper dive thus becomes an exercise in not only value, but in studying maps of the Permian producers — large and small.

Robert Rapier has over 25 years of experience in the energy industry as an engineer and an investor. Follow him on Twitter @rrapier or at Investing Daily.

Robert Rapier is a chemical engineer in the energy industry. Robert has 25 years of international engineering experience in the chemicals, oil and gas, and renewable ene…

Source: Which Company Could Be The Next Permian Basin Acquisition Target?

World’s Largest Business Organization Embraces Blockchain

From the embers of World War I emerged a new kind of organization, led by entrepreneurs, committed to ensuring the free flow of goods across the world’s war-ravaged borders.

The International Chamber of Commerce, whose mission is to streamline global business, is one of last vestiges of the League of Nations, founded in 1920 by U.S. President Woodrow Wilson to peacefully settle international disputes. By 1923, following the League’s lead, the ICC had established international courts to arbitrate business disputes, and in the aftermath of WW II, it represented global business interests at the Bretton Woods conference, which established the current monetary order.

“If goods are able to move across borders without the need to be accompanied by troops,” says John Denton, the ICC’s current secretary general, “there is a higher probability of peace and prosperity.” The Paris-based group, which represents 45 million businesses in more than 130 countries and brands itself the world’s largest business organization, is now making its boldest play in a generation.

With global borders hardening once again, this time behind border walls, broken unions and looming trade wars, Denton signed an agreement with the Singapore-based blockchain startup Perlin Net Group to explore how the technology, made popular by bitcoin for its ability to move value without banks, could help the ICC continue its mission to facilitate the free flow of goods.

“We can trace back the ICC interventions that made a big impact on the global economy in the 20th century,” says Denton, who was a fellow at the Australian Institute of International Affairs before being appointed secretary general of the ICC last year. “We think this might be one which we can look back on in 100 years and say the ICC shifted blockchain in a way that enabled the private sector to function more effectively in a sustainable way and actually create more opportunities for people.”

According to the terms of the agreement, part of which was shown to Forbes, the ICC and Perlin will create a new group, the ICC Blockchain/DLT Alliance, a reference to distributed ledger technology similar to the blockchain that powers bitcoin. The companies are exploring how Perlin’s blockchain platform, which has yet to publicly launch, could be used to shine a light on obscure supply chains and simplify cross-border trade finance.

As part of the agreement, the ICC will help Perlin recruit members to its nascent blockchain alliance, specifically by making introductions to the organization’s massive member pool, which in addition to most national chambers of commerce includes direct membership from companies like Amazon, Coca Cola, Fedex, McDonalds and PayPal. Also, as part of the agreement, Perlin will join the ICC as an official technology partner, offering free access to its blockchain platform during the early stages of the project.

Denton shared his plans with the ICC Banking Commission at its annual event in Beijing earlier this week, and the agreement, which was signed on March 20, will be formally announced at an ICC event in Singapore later today.

Unlike some early blockchain consortia, the ICC Blockchain/DLT Alliance already had projects under way when it was announced. According to the agreement, the ICC and Perlin will share the results of their first blockchain proof of concept, a collaboration with the fabric giant Asia Pacific Rayon (APR), in May at the Copenhagen Fashion Summit.

For that project, called “Follow Our Fibre,” APR is logging data in the blockchain at every level of its supply chain, from the trees that are harvested to the chemical treatments that turn them into the silk-like rayon substance through to the massive spools that are later sold to clothing producers.

“Globally, there is a dynamic shift in the textiles and fashion sectors calling for a more traceable and transparent supply chain,” says Cherie Tan, vice president of communications and sustainability at APR. “Follow Our Fibre will enable us to leverage powerful blockchain functionality to drive greater efficiencies.”

Other proofs of concept in the works that stand to benefit from the ICC partnership include a project with Mfused, a cannabis processor in Washington State that is using Perlin’s tech to prove the origin of its plants by recording every level of its supply chain, from when they are planted to when the cannabis is inhaled, in a shared, distributed ledger; a project with an unnamed tuna processor in Latin America; and a developing project in Africa to trace the origin of cobalt, which has a long history of being mined by unethical supply chain participants.

Assuming enough supply chains are unified on the Perlin blockchain, businesses could log digital representations of the commodities, called tokens, on the platform. This will enable the counterparties to trade directly, with bills of lading required to move freight and letters of credit, which are typically handled by banks, all tracked directly on the shared ledger.

“An interesting economic model is we could effectively launch governance around this,” says Denton. “If we’re able to tokenize this we could insert ourselves as the trusted intermediary, and there would probably be an admin charge, but not much.” A 2018 report by the ICC, the World Bank and others found that 90% of the world’s trade finance was being provided by 13 banks, something Denton thinks is evidence of a need to decentralize.

Perlin’s blockchain, like ethereum’s, is being designed to let users track and move all kinds of value and write distributed applications (dapps) that don’t rely on centralized processors. Also like ethereum, Perlin will have a native cryptocurrency, called perls, which are expected to be minted over the coming three months or so, depending on regulatory considerations.

While supply chain management is increasingly seen as ripe for disruption by blockchain, models like Perlin’s, which rely on tokens, have had difficulty gaining traction as regulators clamp down on what is required of such tokens. By contrast, models using permissioned blockchains, such as what IBM is doing with a number of industry-specific consortia, and what R3 and Hyperledger are doing more generally, are seeing broader interest.

Perlin founder Dorjee Sun positions the nascent ICC network as similar to competing consortia but for small and medium-size businesses. “This is a massive democratization effort of DLT, because now any company of the 45 million ICC members can give the benefits of DLT a try,” says Sun. “Not just massive companies that can afford IBM’s services.”

Be among the first to get important crypto and blockchain news and information with Forbes Crypto Confidential. It’s free, sign up now.

I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies suc…

Source: World’s Largest Business Organization Embraces Blockchain

This Ex-Googler Built What Is Now A $6 Billion Business And Raised $400 Million For His Next Company

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Many entrepreneurs seem to struggle with following what they are passionate about, versus creating startups just for the money.

Mohit Aron went with passion, co-founded a company that successfully completed an IPO with a valuation of more than $6 billion today, and has raised more than $400 million for a second venture which has already surpassed the billion dollar valuation.

After getting his Ph.D. from Rice University in Houston, Mohit made the move to the Valley. After a stint at Google where he was one of the early employees, he has gone on to create highly impactful ventures that have become a large part of the DNA of our tech today.

In a recent appearance on the DealMakers podcast, he shared his take on following your gut, when to go solo (and not), why you should sleep more, how to incubate a winning startup idea and the algorithm for hiring great leaders (listen to the full podcast episode here).

Google, Hyper-Convergence & Taking Time to Think

Mohit was one of Google’s early tech guys and received, as a result, Google shares at $2 per share. He was responsible for managing a team that had the goal of innovating in the file storage space. Selling those shares gave him financial freedom, and refusing just to stay comfortable he ventured out into building companies from the ground up himself.

Mohit takes a very different approach to cultivate startup ideas than most. Rather than jumping on the first idea, running with it and then getting an office, he has taken the time to build the architecture of those ideas and really get clarity before diving in.

For Nutanix, which became one of the early unicorns, hitting a $6 billion valuation and going public, he first rented office space just to develop and crystallize the idea.

Again, avoiding the seductiveness of getting too comfortable, he began working on his next venture, Cohesity, even before his previous company went public. There he repeated the brainstorming process before creating a new tech success, which raised $15 million in Series A funding from Sequoia in just two days.

Cohesity, a modern data management company, empowers enterprises to back up, manage, store and derive insights from their data and apps, has now raised more than $400 million, including $250 million from its latest Series D round. Investors in the company include Accel, Sequoia, Battery, Cisco Investments, Hewlett Packard Enterprise, Google Ventures, Foundation Capital, Trinity Ventures, Qualcomm Ventures, and the SoftBank Vision Fund to name a few.

The Algorithm for Hiring Great Leaders

Cohesity just celebrated hitting 1,000 employees. Mohit has found huge respect for the recruiting process and putting teams of great leaders in place.

He went into Nutanix with cofounders and then went solo on his second venture, a move he only recommends after you’ve had the experience of launching a startup with others.

Still, he admits it was a steep learning curve, especially when it came to hiring. Most notably there is a big difference in hiring technical and business staff. Today, he says if he started a new venture he would raise $1 million, and use the first $300k of that to use an executive recruiter to source three great executives.

Mohit says he learned the hard way on how to hire leaders. Now he uses a three-tiered process that starts with a comprehensive checklist. This outlines who you want from a resume perspective, the type of leader you need for this stage in your company, and the experience they should have. Maybe you want the person coming from a startup. Maybe you want a person who has done zero to $200 billion in revenue before. Then you have a list of candidates that meet your pre-interview checklist.

Then you go through an interview looking for specific things and asking specific questions. One thing you look for in an interview is that this leader is a great people-person and is a great culture fit. Once the person meets at least 80% of the checklist you have formed for the interview, then comes the post-interview checklist.

The post-interview checklist is all about references. Specifically from either people who reported to that leader or people who’ve been peers of that leader, because those are the one who tells you the truth. They will tell you any red flags.

Go with Your Gut

Mohit warns that “when you hire the wrong person, especially when that person is a wrong leader, that sets the company back at least six months if not more. The damage done is immense.”

He believes the body has a way to tell you if something bad is about to happen, and strongly recommends people listen to their gut. If everything else is pointing in one way, but your gut is saying something else, he says listen to your gut. Don’t hire the leader, and go with your gut and look for the next one. Conversely, sometimes the gut says that this is a great hire, and that’s where, as long as they’ve sort of met the checklists and there’s not a huge red flag there, then go with the gut.

Look at their enthusiasm. Look at the person’s willingness to learn. Those bets can be very rewarding.

What Do You Do With All That Wealth?

Mohit no longer does companies for money. He does it for passion. Along the way, he says it ’s also very gratifying to give back. That starts with what you’ve learned. He says “knowledge is free. Knowledge should not be for sale. So, I freely distribute to anyone who comes to me for advice on how to do companies.”

He gives lectures to share this information. The other part of giving is just financially. He’s given to charitable organizations. He and his wife have a structure set up that when they pass away, a bulk of their wealth is actually going to go into a charity.

As a company, his firm gives to a local foundation in San Jose that takes care of providing jobs to young people. He’s also given to Rice University and the Institute of Technology in Delhi which he attended.

He says “life is about giving, and I think giving brings you pleasure. Unlike what people believe, accumulation isn’t always very pleasing, but giving can be very fulfilling.”

Listen in to the full podcast episode for all the details, as well as how to contact him directly with your ideas and questions (listen to the full podcast episode here).

Alejandro Cremades is a serial entrepreneur and author of best-seller The Art of Startup Fundraising, a book that offers a step-by-step guide to today‘s way of raising money for entrepreneurs.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley &…

Source: This Ex-Googler Built What Is Now A $6 Billion Business And Raised $400 Million For His Next Company

How The Son Of A Hedge Fund Billionaire Plans To Cure FOMO With An App

Diesel Peltz, 25, son of hedge fund billionaire Nelson Peltz, is on a mission to cure FOMO (fear of missing out) with Twenty, an app that encourages offline interactions in the real world. Launched on Tuesday, Twenty, formerly known as InSite, seeks to relieve users sense of FOMO by alerting them to the location of their friends, who have to varying degrees disclosed their location, in hopes that offline plans to meet up, or “Hangouts” can be set.

“Our service is fundamentally about what you can share in the analog world,” Peltz told Forbes. “We tell people when they sign up to only add the people you actually want to hang out with in real life.”

For now, the company and its flagship app, have no way to monetize its services.

“The one KPI that we’ve optimized for is the number of real-life experiences,” Peltz said. In the last month, the number of IRL experiences initiated on Twenty has risen to 25,000, “over half” of users signed up in the past month continue to use the platform one month out.

Serial entrepreneur and co-founder Mark French adds that the value proposition for partnering and investing companies like Live Nation, Roc Nation, and talent agency Endeavor (formerly WME/IMG) is that the app will drive transactions, which Twenty hopes to monetize through purchases on the platform within six months.

By taking interaction offline and into the real world, Peltz and French hope to move users away from, “overutilization of social media”.

Elements of the social networking app may feel familiar, the location updates of Foursquare, friends and sharing aspects of Facebook, Instagram, and one could argue the immediacy of Twitter, but Peltz and backers of the project including Khaled Mohamed Khaled, more popularly known as DJ Khaled, argue that this is something different.

“I told my team two years ago, tech that helps people spend time together in real life is going to be the next big thing,” Khaled said in a company-issued statement.

It is ironic and perhaps unlikely that a solution to the endless scroll of social media would come via yet another mobile app, but those backing the product believe it can be a solution.

Arianna Huffington, co-founder of Thrive Global, a health and wellness startup and Huffington Post editor-in-chief along with former model and Casamigos Tequila founder Rande Gerber will join the board at Twenty once it is formed.

In the four years since Peltz dropped out of NYU and founded the company, he has taken his time to bring the company’s first product to market beta testing the app on college campuses including the University of Florida, the University of Wisconsin and Tulane University. Neither founder has felt the pressure to monetize.

Help from dad may have relieved the pressure.

The company completed two undisclosed funding rounds, the first led by Nelson Peltz, and market manager Ron Conway and his seed fund SV Angel. Dad still seems to be lending a hand in the last round of funding which added restaurant developer Tao Group, which is owned by Madison Square Garden, where Nelson Peltz is a board member. Nelson Peltz’ net worth stands at $1.6 billion, the investor started his career in food distribution and founded Trian Fund Management in 2005, which currently has $11 billion AUM.

Peltz says that the app doesn’t solve for users looking to experience JOMO (the joy of missing out) and acknowledges that the market is saturated with tools to share what you’ve already done.

“You construct your friend network for specific purposes, most people have a bloated network of people they don’t actually interact with,” said Peltz. Barring being ghosted, Peltz recommends only adding friend’s whose company you enjoy.

I serve as assistant editor for Forbes Innovation, covering cybersecurity and venture capital. I have covered politics at POLITICO, entertainment for Time Out New York,

Source: How The Son Of A Hedge Fund Billionaire Plans To Cure FOMO With An App

Where You Want To Be: The Meaning Of Mentorship

Slightly more than a decade ago, I welcomed my second child into the world, while waiting to hear if I had been selected into a dermatology residency program. After five grueling years at the country’s top medical school—while raising two babies, and continuing to accrue debt—I was more than eager to start my life as an actual doctor. Today, I am a board-certified dermatologist and dermatologic surgeon specializing in hair restoration, ethnic skin care, and skin cancer surgery in Kansas City and New York City. The immense amount of unwavering determination and hard work that was necessary to arrive at this point in my career cannot be understated…….

Source: Where You Want To Be: The Meaning Of Mentorship

22 Facebook Marketing Tips for Small Businesses on a Budget – Lisa Smith

Image result for 22 Facebook Marketing Tips for Small Businesses on a Budget
Via: http://acceleratedgrowthmarketing.com

As Facebook seeks to deliver the content its users will enjoy most and find most relevant, organic reach has been on the decline. In fact, some say it is downright dead.

This presents a particular challenge for small businesses: You don’t have the same budgets as bigger advertisers to pour into paid posts to compensate.

“The harsh reality of Facebook today is that only about 1 out of 50 people who are already fans of your page will see any single post you make on your Facebook business page,” said Sam Underwood, director of business strategy at digital agency Futurety. “Long gone are the days of posting and knowing that many, if not most, of your fans will see that content.”

But fear not small businesses—there is hope. Here are 22 tips for how to find the right audience and offer up content and experiences they’ll value, even with a limited budget.

1. Post with intent.

According to Christina Hager, head of social media strategy and distribution at media company Overflow Storytelling Lab, small businesses need to be more mindful of how they communicate with their audiences.

You can’t just throw things onto Facebook and hope someone sees them,” she said. “You need to post with intention and then decide what you are going to do with that post”—in other words, whether you are going to boost it with budget.

To do so, Vicki Anzmann, chief creative officer at marketing agency Creativation Marketing, said to use Facebook Insights to help determine a good posting rhythm and content mix.

2. Try to blend in.

“Find ways to convey your brand by being funny, out-of-the-box, informational or unique,” said Eric Johnson, SEO specialist and digital marketer at web design, SEO and marketing firm FeedbackWrench. “Do that, and you’ll be sure to reach a large crowd on Facebook.”

Look at grocery chain Meijer.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/bad-facebook-ad-for-small-business-622×900.jpg

facebook ad for small businessPer Johnson, this post shows below average results because both the design element and the copy strongly suggest a promotional angle.

“When coupled with a link to buy the product, Facebook’s algorithm was likely able to easily determine the overtly promotional approach that this post took on,” he said. “Due to this, the post was, overall, a failed effort.”

Meijer’s other sunscreen post, however, had more than 15 times the interaction because it exists purely for the entertainment value of reminiscing.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/facebook-ad-tips-for-small-businesses.jpg

native facebook ad“Since there was no overtly promotional angle here, the post reached a much larger audience and garnered tons of engagements that got the Meijer brand noticed a lot more effectively than a direct sales approach,” Johnson added.

3. Don’t post without a content calendar.

In order to plan effectively, implement a content calendar.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/facebook-content-calendar-600×401.jpg

content calendar for facebook marketing

Via Falcon.io

“A content calendar is the most effective way to maximize your efforts while minimizing the time spent on Facebook marketing,” said Dan Towers, senior manager of digital marketing at marketing and advertising firm Arcane.

“You can plan out content at one time and by using a scheduling program, like Buffer or Sprout Social, you are able set it and forget it,” he added. “But don’t actually forget it—still monitor your posts and focus on community management. Your customers will appreciate it.”

4. Optimize your profile page.

Because tabs serve as the navigation bar for your Facebook business page, it is important to make sure they are well organized and improve the audience’s ability to find information. By optimizing tabs, restructuring their hierarchy and including or removing important tabs, you provide the user with a smoother experience, said Mackenzie Maher, social media account manager at digital marketing agency Power Digital Marketing.

“If you are a service-based business, make sure your review tab is turned on. If you add tabs that link to your other social pages, make sure these are all grouped together. If you’re promoting an event or hiring for a new position, make sure these tabs are also turned on and advertise your information here,” she said.

 

facebook business page tabs

Via HubSpot

“It is simple, yet seemingly obvious tweaks like these that are often overlooked but can make or break the user’s experience. They should never have to look that hard to find the information they need.”

5. Establish a community page.

Ben Taylor, founder of freelance advice portal HomeWorkingClub.com, said community pages tend to give more organic reach than commercial business pages on Facebook.

“If you make the page invitation-only it makes customers feel special and is a good place to maintain relationships with them, one on one,” he added.

Taylor said he got the idea from the NicheHacks private mastermind group, which discusses affiliate marketing, and then set up his own advice group for HomeWorkingClub.com, which gains about 25 to 40 new members per week.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/facebook-community-for-small-business.jpg

how to start a facebook community“When people sign up to my email list, they’re invited to join the group,” he said.

6. Create a Facebook group.

Maria Mora, content director at digital marketing agency Big Sea, said to create a Facebook Group, not for promotional purposes, but to allow for an exchange of information related to a given business.

“For example, if you sell essential oils, you can create a Facebook group specifically about pet owners trying aromatherapy,” she said. “The key is to find a niche within your customers’ interests and give them a space to connect. As that group grows, you can sparingly share your content, such as relevant articles or whitepapers.”

She pointed to the Ethical Aromatherapy group, which is moderated by essential oil retailer Stillpoint Aromatics, and has more than 13,000 members. Mora said it was created as a resource for consumers to discuss where essential oils are sourced and how to use them safely and it grew organically through members inviting their friends.

However, she warned not to use the group to promote sales or calls to action. The Ethical Aromatherapy page, for example, allows discussion and recommendation of other essential oil importers.

7. Be strategic about your group name.

When creating a group, marketing consultant Ron Stefanski recommended naming it after something people will actually search for in Facebook to increase the odds users will find it. He used this tactic when creating a Facebook group for his website, BengalCatClub.com, which has since gained over 10,000 followers.

“I personally think this tactic could work for any business in any area/industry—Facebook groups do really well to further the awareness of the brand,” he said. “I feel like it’s a good idea that most people aren’t using.”

8. Keep adding to your Facebook story.

According to Bernie Clark, founder of digital marketing and advertising agency Majux Marketing, Facebook Stories make posting often to Facebook much more casual.

“Stories don’t even necessarily have to pertain to company-specific news, they could be anything from fun questions to interesting links, anything to keep your audience engaged and cause a higher likelihood for a click on your profile,” he said.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/facebook-stories-tips-for-small-businesses-600×487.jpg

small business facebook stories marketingNedelina Payaneva, digital marketing specialist at translation services firm Asian Absolute agreed, adding Facebook Stories don’t require slick production value either.

“This type of content has a casual, on-the-go feel,” she said. “Users feel like they are behind the scenes and that works. Similarly, Live feeds are increasing in popularity. From makeup tutorials to studio tours, brands can go live and interact with fans. These can be saved and shared, and have value on the replay side, too.”

9. Don’t obsess over vanity metrics.

Per Tommy Baykov, marketing manager at WordPress hosting services WPX Hosting, small businesses tend to have more limited marketing budgets, which is why they should focus on the things that make a difference to their bottom lines—and not the ones that make them temporarily feel good, like likes.

image: https://cdn.business2community.com/wp-content/uploads/2018/07/facebook-ads-average-click-through-rate-graphic-600×520.png

“Depending on your business and strategy, CTR, 50% video views [and] messages received are just some of the much more meaningful and actionable metrics,” he added.

10. Use Facebook for customer service.

Rafi Bitchakdjian, head of social media at marketing firm Cue Marketing, said smaller brands can lean on Facebook to help them deal with any customer service issues that arise much as corporations use bots to communicate with clients online.

“Audiences expect replies within minutes and Facebook is the ideal on-the-go platform to use when wanting to solve an issue or even just thank a customer for their positive review,” he said.

11. Post with a (small) budget.

Underwood recommends adding a paid budget—even a small one—to ensure reach.

“Try experimenting with different types of content, messaging, imagery and times of day, and use Facebook’s built-in A/B testing system to see what can help stretch your ad dollars to the max,” he said. “Posting without a paid budget is now officially a waste of time—you’re much better off posting just occasionally with a small budget to ensure that content gets in front of your valuable customers and prospects.”

Underwood said one national restaurant chain client has a per-post reach of 1.06% of its total likes on Facebook over the past several weeks—and another Midwest-based food client has seen its per-post reach drop to less than 7% in the last several weeks.

“Both of these are representative of what we’re seeing across all of our client pages recently,” he added.

Keri Lindenmuth, marketing manager at web design and software development firm KDG, agreed Facebook ads are effective because they allow you to custom-tailor the audience by location, age and more.

Recommended for YouWebcast, August 9th: Improving B2B Paid Marketing Campaign Effectiveness Through Pipeline Measurement

“Sometimes it is best if these ads look and sound no different than a regular Facebook post,” she added. “We have found that promoted video and image posts work best.”

12. Narrow your audience.

George Schildge, CEO of digital marketing agency Matrix Marketing Group, said the objective is to narrow down audiences and test to see which will produce the most results for a given objective.

“Think about it as if we were running TV ads and testing in different cities,” he said.

So, for example, for small batch coffee roaster EspressoLuv.com, he narrowed down Facebook users to those who like roaster Blue Bottle Coffee. From there, he can research what else these demographics like.

facebook targeting strategies small business“I’ll do this until I have about 30 other pages to begin narrowing my target audience before I start testing my ad creative,” Schildge added.

13. Consider boosted posts.

Per Greg Bullock, marketing manager at migraine relief company TheraSpecs, Facebook’s boost post feature allows users to expand the audience for their posts exponentially and target highly engaged and relevant prospects—with very little budget.

“Not only can it help you recoup lost organic reach from ongoing algorithmic changes, but it can increase visibility that ultimately generates traffic to your content and/or purchases for your product or service,” he said. “In fact, we have seen our most popular posts generate thousands of clicks for literally two or three pennies per click.”

And while Bullock noted there is tremendous value to setting up a larger campaign in Ads Manager, “sometimes you really only want a few clicks to get going. With boosted posts, you just set your target audience, your budget and you’re off and running.”

He pointed to this boosted post from TheraSpecs, which received nearly 1600 paid clicks at $0.02 per click.

facebook boosted postsTommy Burns, marketing specialist at digital agency Bluehouse Group, however, warned that small businesses have to be even more careful about how they spend their budgets and boosted posts have less targeting, bidding and pricing options.

“Ultimately, that means you’re getting less bang for your buck on each advertisement placement,” he said. “Small businesses use boosted posts because they’re quick and they’re busy. Unfortunately, they are giving up control over the advertisements their audience sees.”

14. Use boosted posts to optimize ads.

For his part, Kevin Namaky, founder of marketing education company Gurulocity, suggested using Facebook ads and boosted posts in sequence.

By creating two ads and giving both a small boost of around $50 to drive initial engagement, small businesses can see which ad generates the most engagement, such as likes, shares and comments. Then, Namaky said, advertisers can create a Facebook ad in Ads Manager with their conversion goal, but instead of recreating the ad, they can reuse the exact boosted post as their creative, complete with likes and shares already on the post.

“This will help your ad convert better than if you ran a new cold piece of creative with no likes or shares on it to begin with,” he added.

To run the exact same post with the social proof, go to your business page, scroll to find the boosted post and click on the date and time at the top of the post. The URL has a unique post number, which you can copy and paste when creating the ad by clicking on ‘use existing post’ and entering the ID under Creative,” Namaky added.

15. Learn how to use Facebook’s Power Editor tool.

If you’re serious about Facebook advertising, Burns suggested learning Facebook’s Power Editor tool to promote posts.

“It allows you to set up A/B test campaigns, create custom audiences based on conversion pixels and use advanced bidding models,” he said.

16. Use Facebook’s product catalog ads.

Kevin Simonson, CEO of performance marketing agency Metric Digital, called not using Facebook’s product catalog ads a “wasted opportunity.”

“This template is a surefire way to create a rich browsing experience for shoppers, encouraging greater product discovery and engagement,” he said. “It’s also the perfect tool for implementing dynamic retargeting. Not to mention, it allows you to connect an existing catalog from another platform, such as Google.”

One ecommerce client saw sales from Facebook remarketing increase by about 300% after implementing Facebook’s product catalog.

“Their ROAS went from 600 to 3000% and their CPA dropped from $45 to $9,” he added.

17. Structure your pixel strategically.

Scott Selenow, president of marketing agency Immerse Agency, said the Facebook pixel collects data about who is visiting your website and allows you to retarget those consumers later.

Facebook also has a lookalike feature, which allows you to target people who have similar online habits as your site visitors.

“The next ad campaign you set up can be all that more successful if you are able to specifically target folks you know have a propensity to interact with your campaign,” he said. “This pixel can help you maximize that intelligent targeting.”

However, if your Facebook pixel is poorly executed, you’ll lose because you’re not getting the data you need, Simonson added.

Facebook conversion tracking Time Spent on Site audience“Smart brands do everything it takes to make conversion tracking, optimization and remarketing easier. Pixel is the perfect tool for doing so,” he said. “It’s what helps you find new customers who are similar to your website visitors. And, shockingly, many of the companies we audit don’t have it set up.”

A small business client was able to turn Facebook into a channel that drove eight figures in spend, which is more than any of its other paid channels.

“Without having their pixel in order, that never would have happened,” Simonson added.

18. Use Facebook Custom Audiences to retarget users who have watched your videos.

Per Andrew Schutt, founder of internet marketing firm Elevated Web Marketing, one of the most consistently effective strategies is using video ads to retarget warm audiences.

“One of the great things about the Facebook Ads Manager is the ability to create custom audiences for your ads based on how long people watch your videos,” he said. “For example, a dentist might run a video advertisement to a cold audience talking about how important teeth cleanings are. After the teeth cleaning video has been running for a few days, we could then set up a retargeting ad that offers a discounted teeth cleaning to new patients.”

But, Schutt said, that dentist can choose to show the ad only to people who have watched over 50% of the teeth cleaning video.

“That way, we know they’re interested in teeth cleanings already, so our ad is going to be much more relevant and effective,” he added. “Whereas if we were to just serve that discount teeth cleaning ad to a cold audience, the engagement rate on the offer would be much lower.”

Schutt said he’s used this strategy with a solar panel installation company and a chiropractor to help generate leads.

“What makes this strategy so effective is that we only show that free offer to people who watched over 75% of the first video. So we know they’re interested in the benefits of chiropractic—we’ve already prequalified them, to a degree,” he said. “In a single week, with minimal ad spend, we generated 18 leads for [a] free [chiropractic adjustment].”

19. Create saved audiences.

Unlike Custom Audiences, Saved Audiences are those you configure through the standard Facebook Ads targeting options. But instead of configuring your audience each time you create an ad or want to boost a post, you can create saved audiences that you can use each time you start an ad campaign, said Chris Smith, co-founder of digital marketing and sales coaching company Curaytor.

 

facebook saved audience

Via Udonis

“This is a great option to use if you plan on targeting similar audiences each time you create specific ads or boost posts from your page,” he said. “Especially when you start creating ads in mass quantity and boost posts regularly, it will save you a lot of time and money.”

20. Test different bidding strategies.

Stacy Caprio, founder of marketing firm Accelerated Growth Marketing, said her #1 tip is to test different bidding strategies, including amount of bid and type.

“You can create four or five different ad groups for an identical ad with different bid amounts and types, let it run for a week or two, then kill off the underperforming ad sets and let the best bid results continue to run,” she said.

In addition, Simonson said Metric Digital has audited more than 1000 small businesses since 2013 and has noticed some companies use conversion bidding, but don’t have enough events tracked to optimize.

“Facebook insists that an ad set needs to generate 15 to 25 conversions per week at minimum to provide enough data to be successful,” he said. “Now, this could be difficult to reach if your company has just started advertising and your budget is small. In our audits, we will often see conversion bidding used on ad sets that are getting far less than this number of conversions. Meaning, if your ad sets can’t hit 25 purchases per week, you can try setting your conversion event to add-to-carts, or another event closer to the top of the funnel.”

21. Don’t forget to test ad placements.

Try both the Newsfeed and right-hand-side ads to see what performs best. That’s according to Namrata Arya, head of digital marketing for domain portfolio registry Radix, who added, “The right-hand side ads, while cheaper than newsfeed ads, may not get you the desired amount of clicks or conversions.”

22. Capitalize on link retargeting.

If you’re using Facebook retargeting ads to boost conversions and attract visitors to your website, you should use link retargeting, too. That’s according to Louisa McGrath, content manager at link management tool Rebrandly, who said this allows you to build out your retargeting lists and reach audiences that haven’t visited your website before, but which have been influenced by your brand on social media.

“Basically link retargeting allows you to add Facebook retargeting pixels to your short link when sharing curated content. Anyone who clicks on this content can be retargeted with relevant ads,” she said. “So you can retarget people who’ve clicked on media coverage, reviews or industry news related to your business, even if the link led to a third-party website.”

 

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